Iran's private sector allowed to sell oil to bypass sanctions
Thursday, 10 May 2012 | 11:00
The Iranian oil ministry has given an Iranian oil products exporting union, a private establishment, permission to sell up to 20% of Iranian crude oil as a way of bypassing international sanctions on dealings with state-owned entities, the students' news agency ISNA reported Wednesday.
The oil ministry has issued permission for the private sector to sell crude oil, Hassan Khosrojerdi, head of the oil products exporters union, was quoted as saying by ISNA.
"Based on the permission, the private sector can carry out the exports of 20% of Iran's crude oil exports or 400,000 barrels on a daily basis," Khosrojerdi said.
Khosrojerdi pointed to the sanctions against Iran's central bank, which handles receipts from oil sales, saying the sale of crude oil by the private sector would overcome this restriction.
EU foreign ministers agreed January 23 to a ban from July 1 on all imports of crude oil and petrochemicals from Iran, which last year exported an estimated 500,000 b/d of crude to the European market. The sanctions also ban dealings with the central bank of Iran and other state-owned financial institutions and banks, making it virtually impossible to transfer funds to Tehran.
At the same time, the US has also introduced sanctions that would penalize any country or entity that deals with the central bank. Washington has offered waivers for countries that significantly reduce their imports of Iranian crude oil by June 28, when the US measures come into effect.
So far, 10 European countries and Japan have been granted waivers for cutting their imports from Iran.
Oil Minister Rostam Ghasemi said Monday that Iran had developed new methods to bypass the sanctions that impact its oil exports both in terms of actual sales and receipt of payment.
"Of course, the mechanism for depositing the oil money [by the buyers] or its location has not been determined by the central bank yet," Khosrojerdi said.
The oil exported by the private union would be priced according to daily published prices, he added.
The US, the EU and the UN Security Council have since January imposed a raft of new sanctions against Tehran in an effort to deprive the Islamic Republic of oil revenues with which to finance what they suspect is a covert nuclear program. Tehran has denied that its nuclear program is military and says it is designed to generate electricity.
Khosrojerdi said that the conditions set by the oil ministry for allowing sales by the private sector include direct sales to foreign refineries and the exclusion of the state-owned National Iranian Oil Company from the marketing process.
Source: Aresu Eqbali, Platts
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