Economic expert: Too costly for Iran to sell its oil through outside traders

Business Materials 27 September 2012 12:42

Azerbaijan, Baku, Sept. 27 /Trend S.Isayev, T. Jafarov/

It is too costly for Iran to sell its oil through outside traders, economic expert Mehrdad Emadi told Trend.

He was commenting on the recent news about world oil traider Vitol buying and selling Iranian oil, avoiding the international sanctions.

While Emadi agreed that using outside traders for selling Iran's oil is a good idea, he said that it comes out too costly.

"The traders that sell Iran's oil require very high revenues from sales, and this is very damaging to Iran," Emadi said. "This is the reason for Iranian government to suspend currency supply to various domestic manufacturers."

"Currently, Iran is experiencing oil related problems even with its long-term buyers," Emadi said. "The main problems are the oil price and the transportation".

Swiss-based Vitol is not obliged to comply with a ban imposed in July by the European Union on trading oil with Iran because Switzerland decided not to match EU and U.S. sanctions against Tehran.

The company earlier in the year stopped trading Iranian crude oil from its main European offices before the July 1 EU embargo deadline. But the trading sources said it has continued to deal in Iranian fuel oil from the Middle East.

The tale of the cargo of Iranian fuel oil involves tanker tracking systems being switched off, two ship-to-ship transfers, and blending of the oil with fuel from another source to alter the cargo's physical specification.

The expert added that last week Tehran announced that the oil exports have dropped by 200,000-220,000 barrels in the last 1,5 months.

"While Iran has its own tankers that be can legally used for non-Iranian companies, this has not worked out very well because of the imposed sanctions," Emadi noted, adding that oil sales through second and third channels did not come out as profitable as expected for Iran.