Crude oil selling suspended at Iran Energy Exchange

Business Materials 11 August 2014 15:11 (UTC +04:00)

Baku, Azerbaijan, Aug. 11

By Umid Niayesh - Trend:

Crude oil selling has been suspended at Iran Energy Exchange due to lack of buyers.

Ali Hosseini, the managing director of the Iran Energy Exchange said that domestic companies refuse crude buying due to high price, the country's IRIB news agency reported on Aug. 11.

Hosseini also remarked that only thirteen private domestic refinery companies are permitted to buy crude at the Energy Exchange.

Only 13,000 barrels of crude oil was sold at the exchange since its establishment on April 6, 2014, he added. He went on to add that the private sector did not welcome the crude oil offer at the exchange due to price difference.

Hosseini explained that the crude oil is being sold for private sector buyers based on free market rate of rial/USD which is higher from the free market rate. Meanwhile the state-run refineries buy the crude oil on official rate. The U.S. dollar was sold at the price of 31,250 rials on the free market on August 11, while the official price of the USD stood at 26,464 rials.

Hosseini said that at the time being each barrel of crude oil is being sold at 3.6 to 3.8 million rials.

The National Iranian Oil Company, which is the exclusive seller of Iranian crude oil, offered the crude oil consignment on the exchange.

Earlier in April, Iranian media outlets quoted Hosseini as saying the Exchange has the potential to play a pivotal role in determining oil price in the region. He explained that since Iran is an oil-rich country, the country's energy bourse has the potential to increase supplies from current 3,000 b/d to 10,000 b/d.

Iran aims to prepare the ground for the presence of foreign buyers of crude oil in the energy exchange and diversify the products supplied to buyers including gas condensates, Hosseini noted.

The proposal to trade oil at bourse was first raised in 2000.

Edited by CN