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Corruption in selling oil via stock exchange impossible - official

Oil&Gas Materials 20 October 2018 10:46 (UTC +04:00)

Tehran, Iran, Oct.20

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Oil sale in the stock market provides Iran with an impact on the global oil market, CEO of Ahdaf Investment company, one of the major oil companies and subsidiaries of the Iran national oil company, Omid Ghaemi told Trend.

"Oil stock has an important role in transparency. Basically, offering every commodity via the stock market has contributed to the production of that product, and the transfer of oil to the stock exchange can also provide a platform for Iran's influence on the global oil market," Ghaemi continued.

He rejected the possibility of corruption in the process of selling oil via stock exchange and said that one of the characteristics of the stock exchange is the opportunity of a fair and equitable access to the market, and by the formation of an oil stock exchange the corruption and rent-seeking will be eliminated and the opportunity will be given to everyone,” he said.

He went on to add that the formation of the Iranian oil bourse a head of the US economic sanctions is an important effort.

"During the sanctions, the oil bourse opens the way for the private sector to buy oil from the stock and to refine or combine it with its own tools,” Ghaemi said.

Iran is reopening its domestic crude oil exchange in preparation for a first attempted sale - of 1 million barrels - on October 22.

Private parties who buy oil through the bourse must attempt to resell them to international traders. NIOC (National Iranian Oil company) typically sells its crude directly to foreign refineries. However, many have already begun to retreat further purchases ahead of the US sanctions.

The bourse was last used four years ago with limited success when US sanctions were employed to try to block Iranian oil exports.

Nearly a decade of sanctions has intensified the potential of corruption. As sanctions slowly started to bite in 2006, Iranian businessman Babak Zanjani set up a worldwide web of dozens of front companies with the task of evading the sanctions.

When Europe stopped buying Iranian oil in 2012 and the United States started to pressure top Asian buyers, Zanjani and numerous others found ways to sell Iranian crude on the black market. He would send tankers to deserted bays along the coast of Indonesia, for instance, where they would transfer the oil to other ships to hide its origins.

Zanjani’s arrest in 2013, was portrayed as a symbolic break with the high levels of corruption.

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