If you’re looking for cheap crude oil and you are not worried about going against US sanctions, have we got a deal for you: Iran’s state-run oil company, the National Iranian Oil Company (NIOC) has plans to offer crude oil and gas condensates for a substantial discounts, according to PressTV.
NIOC will offer condensates at $6 per barrel less than the free-on-board price on the MCE market in the United Arab Emirates. NIOC will sell light crude oil for $7 less than Brent on an FOB basis, and heavy crude for $8.50 below Brent.
The new terms will go into effect in the next couple of days, Amir Hossein Tebyanian, a NIOC representative said.
But the price isn’t the only concession Iran is making to sell its oil amid US sanctions. It will also remove some qualification requirements for interested buyers, and will lower the amount buyers must pay upfront. NIOC will also allow buyers to take longer to pay for the oil cargoes.
NIOC is hoping that the new terms will help it to sell off 6 million barrels on the IRENEX every month, but that sounds rather ambitious, given that NIOC has only sold 1.1 millions of crude oil at IRENEX over the last month, and it has sold zero condensates this way.
While not absolute, the re-imposed United States sanctions have restricted Iran’s crude oil trade and it is affecting Iran’s cash flow. Most recently, Iran has reached out to South Korea in an attempt to get $6 billion that Iran says it is owed for crude oil that delivered prior to the end of the sanction waivers.
Iran’s President Hassan Rouhani has also announced a “budget of resistance” to the US sanctions, which include a $5 billion loan from Russia that would reduce its dependence on revenue from crude oil.
By Julianne Geiger for Oilprice.com
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