Iran hopes private oil exporters may dodge sanctions

Monday, 14 May 2012 00:00 - - {{hitsCtrl.values.hits}}

DUBAI (Reuters) : Iran has authorised private Iranian exporters to sell up to 20 percent of its crude exports in a move intended to help skirt international sanctions, the head of the traders’ union said last week.

The head of the oil products exporters union said the decision by Iran’s oil ministry would circumvent sanctions on the Iranian central bank, which handles receipts from oil sales, but did not say how the companies could otherwise handle financing and trading issues.

“On this basis, the private sector can export 20 percent of Iran’s crude oil exports, or 400,000 barrels per day (bpd),” Hassan Khosrojerdi was quoted as saying by the Iranian Student News Agency (ISNA).

The conditions set by the oil ministry for private sector sales of crude include direct sales to foreign refineries and the exclusion of the state-owned National Iranian Oil Company NIOC from the marketing process, Khosrojerdi said.

Historically, the NIOC was solely responsible for the sale and marketing of the Islamic Republic’s crude.

Western states have imposed sanctions on Iran’s energy and banking sectors since the beginning of this year to try to disrupt Iran’s nuclear program, which they suspect is being used to develop atomic bombs. Tehran denies this.

The European Union is preparing to slap a total embargo on the purchase of Iranian crude oil in July.

However a growing list of Asian customers including China, Japan and India have cut down on Iranian crude purchases this year as sanctions make it impossible to pay, ship and insure the oil.

This year, Iran’s oil exports are running at between 200,000 to 300,000 bpd below last year’s level, according to the International Energy Agency (IEA). Iranian officials said the country had exported an average of 2.2 million bpd in 2011.