Iran Ships First Oil to E.U., Seeks Growth in Japan

File image courtesy Shana / Mohammad Ghadamali

By MarEx 2016-02-15 20:20:25

The National Iranian Oil Company (NIOC) announced Saturday that its first shipment of oil to Europe since the end of sanctions would soon sail.

Roknoddin Javadi, the firm's managing director, told the Shana news agency that NIOC had loaded four million barrels of crude for European destinations. "2 million barrels of the cargo has been purchased by France's Total and the rest was purchased by companies from Russia and Spain," he said, adding that the tankers would sail within 24 hours. 

Minister of Petroleum Bijan Zangeneh announced after President Hassan Rouhani's goodwill tour of Europe that Total had agreed to the purchase of 160,000 barrels per day of Iranian crude. Media sources suggested that the other two buyers were Lukoil trading arm Litasco and Spanish oil company Cepsa.

Iran has repeatedly said that it will raise its oil exports quickly – up by a million barrels in months, regardless of price, in an all-out attempt to regain its “quota” of world exports – though analysts suggest that shipping insurance issues and a glutted world market may hamper its efforts. On Sunday, Javadi announced that NIOC had achieved the addition of 400,000 barrels per day of production, in line with its initial increase goal of 500,000 barrels.

Last week, Reuters reported that internal sources at NIOC said the firm was undercutting the price of Saudi grades in the European market, with official prices in the range of 15-20 cents per barrel lower than Aramco's rates. In a statement Monday, NIOC's managing director for international affairs, Seyyed Mohsen Qamsari, dismissed the report as false. “Iran's oil is priced in proportion to the official price on the market,” he said.

Separately, on Monday, Zangeneh met with Katsuyuki Kawai, an adviser to Japanese Prime Minister Shinzo Abe, regarding an upcoming state visit by the prime minister.

“There are grounds for cooperation between the two countries in oil refinery, LNG, petrochemistry, investment and projects financing sectors,” Zangeneh said. Kawai's trip is intended to lay the groundwork for Prime Minister Abe's visit, and Zangeneh expressed hope for restoring the nations' energy trading ties. “We expect Japan and companies managed and overseen by the country’s government to boost Iran's oil purchase to at least pre-sanctions level,” he said.