Iran Said in Talks to Sell Crude to Trafigura for China Teapots
![Iran Said in Talks to Sell Crude to Trafigura for China Teapots Iran Said in Talks to Sell Crude to Trafigura for China Teapots](/files/en/news/2016/8/10/10518_606.jpg)
EghtesadOnline: Iran’s state-run oil company is said to be in talks to sell more crude to oil trader Trafigura Group, including via a potential long-term deal, in a strategy that may help it break into the market to supply China’s independent refiners.
National Iranian Oil Co. may sell more of its Heavy crude grade to Trafigura, according to people with knowledge of the matter, who asked not to be identified because the discussions are confidential. The supplies may then be resold to Chinese independent processors, known as teapots, they said, adding that the talks are ongoing and a deal hasn’t been finalized.
According to Bloomberg, a Geneva-based spokeswoman for Trafigura declined to comment while NIOC officials in Tehran weren’t available for comment.
The potential sale of oil to teapots would help Iran’s drive to expand market share in Asiaafter international sanctions were removed against the Persian Gulf state. The Middle East producer sells most of its crude via long-term contracts directly to refiners, and allows existing buyers to purchase additional spot cargoes. But it’s now willing to reach Chinese private refiners via Trafigura because the trader would be better suited to supply the processors who typically buy shipments at short notice and in small quantities.
Trafigura bought about 2 million barrels of Iranian Heavy crude from NIOC for June loading, with the tanker carrying the supply currently anchored off South Korea. Previously, the shipment floated for three weeks off the Chinese port of Qingdao, which is used by teapots to receive oil supplies.
Earlier this year, Iran’s rival producer Saudi Arabia broke from its usual practice of selling via long-term contracts to supply a cargo to a Chinese teapot refiner, in what Citigroup Inc. then said was a“dramatic” shift in the Middle Eastern kingdom’s oil-market strategy.