News ID: 199106
Published: 0301 GMT August 21, 2017

Iran awaits more crude cargoes to officially resume Caspian deal soon

Iran awaits more crude cargoes to officially resume Caspian deal soon

Iran is set to receive another nine crude oil cargoes as part of a Caspian oil swap deal which is due to officially resume soon, government officials said.

Hamid Hosseini, the director of the north region at Iranian Oil Pipeline and Telecommunication Company, said official resumption will start once there is enough crude oil, Platts reported on Monday.

"So far, three tankers have entered Neka port. Nine other tankers are on the way so that the stocks reach a level that can be pumped into the pipeline and swap operations can start officially," Hosseini was quoted as saying.

Iran's swap involves receiving crude oil from neighboring Caspian states at Neka port on the Caspian Sea to be processed at its northern Tabriz and Tehran refineries. In return, Iran delivers the same amount and quality of oil to customers of exporting countries from its southern oil terminal of Kharg in the Persian Gulf.

The arrangement ended in 2010 following a decision by former oil minister Masoud Mirkazemi, who argued that Iran was losing a few dollars on each barrel. Iran also complained that the poor quality of the oil received under the swap was damaging its northern refineries.

"Once there are enough oil consignments to start with, swap operations will be launched at a volume of 90,000 to 110,000 bpd," Hosseini said.

"Swap operations in this region has not been carried out around seven years. In order to prevent erosion and damage in the line, we were carrying out reverse crude oil transfer," he added.

Iran has previously received three crude oil cargoes from Turkmenistan. It could also resume its swap arrangement with Kazakhstan and Russia — the two countries that have been in talks with Iran to this end.

Separately, Iran also hoped on Saturday that it will be able to begin crude oil sales to Russia under an oil-for-goods deal by early October.

"The contract for sales of 100,000 bpd of oil to Russia was finalized around two to three months ago. And we hope that purchase of oil by Russia from Iran starts as of late September or early October," Amir Hossein Zamani-Nia, deputy oil minister for international and commercial affairs, was quoted as saying.

"The value of 50 percent of the mentioned export consignments will be paid to Iran in cash and the rest will be used to finance imports of Russian goods," he added, with Iran to receive payment for the oil in euros.

The deputy oil minister underlined the significance of the deal and said it would "expand Iran-Russia cooperation in all sectors".

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