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Iran says oil swap not economically justified

Oil&Gas Materials 18 April 2014 17:39 (UTC +04:00)

Tehran, Iran, April 18

By Milad Fashtami - Trend:

Oil swap is not economically justified for Iran.

Hassan Khosrojerdi, head of Iran Oil Products Exporters Union, said on April 18 that Iranian government presently isn't favoring the oil swap, Iran's Fars News Agency reported.

"Since oil prices in the Caspian Sea and Persian Gulf regions are different, oil swap is not profitable for all companies," he said.

"Oil swap can only be economically justified if the two sides swap products, based on the value of cargoes," he explained. "We have suggested this idea to the government, but the administration has yet to answer."

Iranian Oil Minister Bijan Namdar Zanganeh said on March 1 that he is not aware of any new swap deal with neighboring countries.

According to ISNA, Iran's oil swaps have been halted for over three years, because former oil minister would turn Iran into an oil-importing country.

It is while under the US-led sanctions against Iran's oil industry, oil swaps could play a vital role for Iran's economy.

Managing Director of the National Iranian Oil Refining & Distribution Company, Abbas Kazemi, told SHANA News Agency on Jan. 3 that Iran plans to increase oil product swaps with its neighbors to prevent fuel smuggling.

He went on to say that Iran is interested in increasing a swap with Afghanistan and Pakistan.

Oil and oil product swap deals with neighboring countries were repeatedly suspended during the administration of ex-President Mahmoud Ahmadinejad (2005-2013).

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