Concerns over selling abroad behind high pricing oil offered in Iran Energy Exchange
Baku, Azerbaijan, Aug. 22
By Umid Niayesh - Trend:
Iran's Oil Minister Bijan Namdar Zanganeh has confirmed that sale of crude oil at the Iran Energy Exchange has been suspended due to lack of buyers.
He said that the country's private sector refused to buy crude oil at the Energy Exchange because it was offered based on the price of the Persian Gulf market, Iran's Mehr news agency reported on Aug. 22.
Zanganeh explained that "If we are sure that the offered oil is consumed in domestic refineries, we will sell it at 95 percent of the Persian Gulf market price."
"The final destination of the sold oil should be clear for the ministry," he said, adding "we will not sell the oil for rentiers."
Earlier Ali Hosseini, the managing director of the Iran Energy Exchange said that domestic companies refuse to buy crude due to the high price.
Hosseini also remarked that only thirteen private domestic refinery companies were 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 note 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 than the free market rate. Meanwhile the state-run refineries buy crude oil at the official rate.
The U.S. dollar was sold at the price of 31,000 rials on the free market on Aug.11, while the official price of the USD stood at 26,500 rials.