Iran Sets Crude Oil Export Volumes for Europe
February 06 2016 - 7:45AM
Dow Jones News
By Benoît Faucon
Iran plans to sell 300,000 barrels of crude oil a day to
European customers now that Western sanctions are lifted, the
country's oil minister told state media Saturday.
It is the first time Iran's top oil official, Bijan Zanganeh,
has said how much of its new exports would be headed for Europe, a
major market for the Islamic Republic before much of the West
imposed sanctions in response to Tehran's nuclear program in 2012.
Iran is trying to boost its oil exports by 500,000 barrels a day in
the next few months, with much of the rest going to Asia.
The new details of Iran's plans demonstrate how the world's
biggest energy producers--among them Saudi Arabia, Russia, Iran
itself and the U.S.--are pushing hard to grab their share of the
European energy market.
Saudi Arabia last week again slashed its prices for European
buyers of oil, including a type similar to the crude that Iran
produces. U.S. producers are planning their first shipment of
liquefied natural gas to Europe, eating into Russia's main market
for gas exports.
Competition for market share has weighed on oil prices, which
fell to $27 a barrel in January-- a 12-year low--and have hovered
around $35 a barrel in recent days. Global demand hasn't kept pace
with the vast new supplies from Russia, Saudi Arabia, Iraq and now
Iran.
Mr. Zanganeh's comments, reported by state-run oil news agency
Shana, came amid signs that European oil-tanker companies were
finding ways to ship Iranian oil despite remaining American
sanctions on Iran related to terrorism and the country's
human-rights record.
Glencore PLC, the Switzerland-based mining and trading giant,
became the first Western company to load Iranian oil on Friday
night, shipping company officials said. A tanker chartered by
Glencore AG loaded 80,000 metric tons of fuel oil at the Iranian
oil-products terminal of Bandar Mahshahr late Friday and left bound
for the United Arab Emirates, according to shipping officials and
ship-tracking website FleetMon.
Glencore declined to comment.
Many shipowners have been reluctant to carry Iran's oil because
the remaining American sanctions prohibit transactions in dollars
with Iranian entities. Most oil is paid for in dollars, and many
European insurers use the American financial system or pool
resources with American companies, making it difficult to insure
vessels.
One British insurer, whose clients include a tanker owner booked
to carry Iranian crude, said he wouldn't oppose such shipments, but
warned that accidents may not be fully covered.
Glencore's shipment is the first in a wave of European purchases
of Iranian oil, though the others have yet to be loaded.
Mr. Zanganeh said Total SA, the French oil company, will start
importing 160,000 barrels a day of oil starting on Feb. 16. Total
has chartered a 2-million-barrel tanker to load crude next week,
according to shipping officials. Total has previously said it would
buy 150,000 to 200,000 barrels a day, but declined to comment on
its planned loading next week
Mr. Zanganeh added that Total is also interested in Iran's South
Azadegan field--which is close to Iran's Western border with
Iraq--and Iran's LNG export project.
Write to Benoît Faucon at benoit.faucon@wsj.com
(END) Dow Jones Newswires
February 06, 2016 07:30 ET (12:30 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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