Crude oil sale at IRNEX to go on

November 2, 2018

TEHRAN- National Iranian Oil Company’s (NIOC) Director for International Affairs Saeed Khoshroo announced on a Thursday televised interview that his company will continue offering crude oil at Iran Energy Exchange (IRENEX) as long as there is demand, IRIB reported.

“Selling crude oil at IRENEX will continue and the offered volume of one million barrels on October 28 was just to assess the private sector customers' demand,” he said.

“The private sector warmly welcomed trading oil at IRENEX thanks to the flexible policies applied at this market which do not exist in direct oil purchase contracts between NIOC and customers.”

Discussing NIOC’s measures to ease trading oil at IRENEX and protecting private sector buyers, Khoshroo added that some negotiations have been conducted with oil tanker sector as well as related banks in this regard.

As he further explained buyers can make their purchases using euro, dirham, and yuan at IRENEX and in near future some other currencies would be accepted at the market if the Central Bank of Iran (CBI) ratifies the issue.

Last Sunday on October 28, just few days before new U.S. sanctions on petroleum sector take effect (November 4, 2018), NIOC could sell some 280,000 barrels of crude oil at $74.85 per barrel on the first day of offering crude oil for export at the international ring of IRENEX. With the daily supply value of one million barrel per day, the market wrapped up by selling eight 35,000-barel-cargos of oil on the day.

Establishment of IRENEX, which is considered as a turning point in Iran's strategic oil industry and capital market and also a platform for producers and consumers to be in touch and pay lower trade costs in a transparent business environment, can be translated into creation of a new energy stock market that results in economic development.  Absorbing a part of available liquidity and injecting it to production sectors and financing various industries, especially those active in energy sector, it can bring financial discipline and spur domestic production and economic growth.

The energy market is basically exports-oriented and has the capacity to increase Iranian oil customers both domestically and internationally. Price setting relies on the base price determined by NIOC according to global prices. Receiving a trading code, foreign companies can purchase oil cargos from IRENEX. By now, over 100 trading codes have been received by foreign customers at IRENEX which could be used to purchase oil cargoes and oil products. The Securities and Exchange Organization (SEO) preserves the customers’ data from all across the world confidential.

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