Glencore, Vitol Near Deal to Buy Iranian Crude
May 12 2016 - 2:30PM
Dow Jones News
TEHRAN—Glencore PLC and Vitol Group, the world's two largest
independent oil traders, are close to signing a long-term deal to
purchase Iranian crude, a top Iranian official said.
The potential deal would mark the return of two of Iran's
biggest oil trading partners before Western sanctions over the
country's nuclear program were tightened in 2012. Iran has sought
to ramp up production since those sanctions ended in January. But
many Western buyers have been reluctant to purchase its oil because
their banks are concerned about falling foul of remaining U.S.
sanctions.
Glencore and Vitol representatives declined to comment.
Iran and the two Swiss-based companies are close to reaching
separate agreements with state-owned National Iranian Oil Co., said
Mohsen Ghamsari, the company's director of international affairs,
in an interview.
Mr. Ghamsari said one of the main issues to iron out is that the
state company wants to choose the destination of the crude that it
sells Glencore and Vitol. It isn't unusual for Iran's state oil
company—or those in other countries --to dictate where oil traders
market their crude.
In a separate interview, Iran's deputy oil minister Amir Hossein
Zamaninia said Glencore and Vitol have purchased mostly oil
products from Iran until now.
Glencore—which trades large quantities of oil in addition to the
copper, coal and other commodities it mines and sells—became the
first Western company to load Iranian oil products since the end of
sanctions, but the cargo was made of fuel oil, rather than more
expensive crude. It has struggled to find financing for the crude
purchase, according to an Iranian trader involved in the deal.
Many European banks have been wary of doing business involving
Iran while U.S. sanctions over terrorism and weapons are still in
place and a ban remains on dollar-denominated transactions.
European banks like HSBC and Standard Chartered have settled
previous allegations of doing illegal business with Iran.
U.S. Secretary of State John Kerry traveled to London Thursday
to tell European bankers to address their concerns. He said banks
could do "legitimate business" in Iran.
Write to Benoit Faucon at benoit.faucon@wsj.com
(END) Dow Jones Newswires
May 12, 2016 14:15 ET (18:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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