NIOC to revise regulations of oil offering at IRENEX

November 8, 2019

TEHRAN – National Iranian Oil Company (NIOC) has once again decided to revise the regulations pertain to the offering of oil at the country’s energy exchange (IRENEX), IRNA reported on Friday, quoting an NIOC official.

According to Amir-Hossein Tebyanian, NIOC’s representative at IRENEX, the offerings at IRENEX have been made based on the guidelines provided by the Oil Ministry in late-May, however, the regulations are being revised again.

“There have been no recent changes in the volume of crude oil and condensate offerings at IRENEX,” Tebyanian stressed. 

After several unsuccessful offerings of light crude oil, NIOC decided to halt the process of offering oil and gas condensate in mid-May to prepare new guidelines for the later offerings. Accordingly, for the 10th round of light crude oil offering which was the third round of offerings in the new Iranian calendar year (started on March 21) NIOC decided to offer two million barrels of light crude instead of the previous one million barrels.

The least amount of purchase was also reduced to 10,000 barrels from the previous 35,000.

However, it seems that even those adjustments were not enough to attract buyers and NIOC has decided to once again make new changes in the regulations regarding the oil offerings to make it more attractive for potential buyers.

NIOC recently halted the crude oil and gas condensate offerings at IRENEX, resulting in some rumors saying that the offerings are to be stopped permanently, however, NIOC has repeatedly rejected the rumors, announcing that oil offerings will definitely continue.

In late October, Tebyanian pointed to technical problems as the reason for the hiatus in offerings.

“The process of offering crude oil and gas condensate will be ongoing on a regular basis, and the recent interval has been due solely to customizing and updating the process to match the market conditions and future offerings will be announced soon,” he told Shana on October 30.

The official noted that since offering oil and gas condensate in the stock exchange is naturally affected by market conditions and “we should therefore not have unrealistic expectations regarding the oil sales through this platform.”

Offering crude oil and gas condensate at IRENEX is to materialize the objectives of “Resistance Economy” for diversifying methods of selling these products and benefitting from the capabilities of private sector for exporting them.

National Iranian Oil Company offered light crude oil at IRENEX first on October 28, 2018, just a few days before new U.S. sanctions on Iran’s petroleum sector took effect (November 4).

Offering gas condensate at IRENEX came after the successful offering of crude oil at this market. And then the turn came to heavy crude. Offering heavy crude at IRENEX came after NIOC offered light crude at this stock market in eight rounds. 

Now, after nearly one year, the released reports show that sales of these products has not been so successful and welcomed, as according to the representative of NIOC at IRENEX, just about one million barrels of light crude and 70,000 barrels of heavy crude have been sold at IRENEX since the second Iranian calendar month of Ordibehesht (began on April 21), although the products have been regularly offered at IRENEX on a weekly basis.

IRENEX Managing Director Seyed Ali Hosseini believes that policymaking and execution are not integrated, and it is the reason behind the slow trend of the trades in IRENEX.

EF/MA

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