Iran Launches First Oil Shipments to Europe in Three Years
15 February 2016 - 6:54AM
Dow Jones News
By Benoît Faucon
The first shipment of Iranian crude oil to the European Union in
more than three years is poised to depart as soon as Monday,
Iranian officials said.
A tanker chartered by French energy giant Total SA is expected
to sail with 2 million barrels on Monday, the officials said. Two
others will carry 1 million barrels each for Spain's Compañía
Española de Petróleos, or Cepsa, and Litasco, the trading arm of
Russia's Lukoil, they said.
The ships are carrying a portion of a flood of new oil that Iran
says it is producing since world powers agreed to lift Western
sanctions related to the country's nuclear program. Those sanctions
crippled Iran's oil industry, reducing its export capacity by more
than 1 million barrels a day.
Rokneddin Javadi, the deputy oil minister, was quoted by state
television broadcaster Press TV on Sunday as saying that Iran's
crude-oil production had increased by 400,000 barrel each day. That
is the bulk of its stated short-term, post-sanctions target of
ramping up production by 500,000 barrels a day.
Litasco, Total and Cepsa didn't respond to requests for comment
over the weekend. Iranian officials said the companies were loading
over the weekend at Iran's oil terminal at Kharg Island.
Iran is aiming its new exports at two of its prime customers
before sanctions: Asia and Europe. While some Asian buyers
continued doing business with Iran at reduced rates during
sanctions, Europe had imposed a total embargo.
Now Iran has lowered its prices to refineries along the
Mediterranean Sea in an effort to compete with rivals like Saudi
Arabia and Russia, which had moved to grab Iran's market share when
it was driven out of Europe.
The tankers began loading after European oil traders and
shippers won a key victory allowing the cargoes to be insured. The
American Steamship Owners Mutual Protection and Indemnity
Association, Inc., or American Club, said U.S. sanctions preventing
it from covering cargoes originating from Iran had been
removed.
The new Iranian oil has weighed on crude prices, which already
were struggling. Prices have fallen more than 70% since their June
2014 peak of $114 a barrel, largely because new supplies from the
U.S., Saudi Arabia, Russia and Iraq have outrun growth in the
demand for crude.
Iran is a member of the Organization of the Petroleum Exporting
Countries, which produced an additional 280,000 barrels a day last
month, said the International Energy Agency, which tracks oil and
gas data for industrialized countries. As a result, inventories
will build by 2 million barrels a day in the first three months of
2016, it added.
(END) Dow Jones Newswires
February 14, 2016 14:39 ET (19:39 GMT)
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