An arbitration court has ordered Israeli-held Trans-Asiatic Oil (TAO) to pay US$1.2 billion to Iran for oil that the National Iranian Oil Company (NIOC) had delivered to Israel before the 1979 Islamic Revolution, the online edition of Israel’s Haaretz reported on Monday.
Lausanne-based Swiss Supreme Court has ruled in favor of Iran in the case which Israel had appealed.
In May 2015, Israel said it was refusing to comply with an order by a Swiss court that it pay US$1.1 billion to NIOC. The complex dispute stems from 1968, when Shah Reza Pahlavi ruled Iran. The Eilat Ashkelon Pipeline Co. (EAPC) was created as a joint venture between TAO and the NIOC to supply Iranian oil to Europe.
After the Islamic Revolution of 1979, however, Iran and Israel severed diplomatic ties. Iran has pursued arbitration to force Israel to pay up. The combined sum in dispute in the courts is estimated at around US$7 billion.
According to Monday’s online edition of Haaretz which quotes Global Arbitration Review, NIOC had been removed from the sanctions list against Iran and therefore, there is no legal obstacle for Iran to receive its payment.
Iran has won two arbitrations demanding that Israel pay for the oil supplied to it, with the primary bone of contention over revenues of the partnership still awaiting ruling.
Iran’s crude output hit a five-year high in June 2016 as the country is eager to reclaim its number-two OPEC exporter spot after Saudi Arabia.
And last month, NIOC director of international affairs, Mohsen Ghamsari, told Bloomberg that Iran had regained 80 percent of the market share it had before the oil sanctions were tightened in 2012. Iran is currently pumping 3.8 million barrels a day, of which it exports 2 million barrels, the manager noted. The country wants to raise its daily output to 4 million bpd by the end of this year and to pump 5.8 million bpd in crude and condensates combined by 2021.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.