Shell still Owe $2.3 Billion to Iran for Crude Purchased in 2012

Royal Dutch Shell has announced that it still owes $2.3 billion to Tehran for crude products traded in 2012 up until the summer deadline when the EU embargo took effect.

Shell announced that its trading division generated gross revenues of $481 million from Iranian oil in 2012 with a net loss of $6 million, and revenues of $631 million from condensate and fuel oil purchases, recording a net profit of $4 million.

All trade was completed and then suspended before the June deadline, but Shell were unable to settle its accounts with the National Iranian Oil Company (NIOC) before the EU embargo prevented any further financial transactions with Iranian banks.

Related article: Shell to Spend $1bn in Iraqi Oilfield Development

Shell claimed that, “none of these purchases have been paid for, and all contracts were terminated and activities ceased before June 28, 2012. Currently, we have approximately $2,336 million payable to, and $11 million receivable from, National Iranian Oil Company. We are unable to settle the payable position as a result of applicable sanctions.”

Shell has not commented on how it intends to pay its debts to Tehran. Initially it hoped to pay via a direct bank transfer, but permission was denied by the British government due to the sanctions. Sources then told Reuters that Shell were investigating the option of organising a grain barter deal via US agribusiness giant Cargill, although this was also blocked by authorities in Europe and the US.

By. James Burgess of Oilprice.com