Iranian oil on the way for 33-year long enemy

Iran Materials 11 September 2012 13:22 (UTC +04:00)

Dalga Khatinoglu, Trend Agency's Iran service department chief

Iranian Oil Minister Rostam Qasemi said on Monday that Iran is talking with Egypt to export oil. The two countries had severed relations since 1979 because Egypt's late President Anwar Sadat received Iranian exiled Shah Mohammad Reza Pahlavi who fled Iran following the revolution and also because of the signed Israel-Egypt peace agreement during Sadat's presidency.

Qasemi's statement came a week after his Egyptian counterpart Osama Kamal told the state owned Al-Ahram newspaper that Cairo had "no objection" to importing Iranian crude and processing it in Egyptian refineries.

Iran's oil export has been disrupted by the latest European sanctions that led to a cut in Iranian crude import by 27 Union members and insurance cover for the tankers which carry Iranian oil was also stopped.

About 40 days ago, Reuters reported that Iran has delivered about seven million barrels of crude at the Egyptian port of Sidi Kerir to some unknown people calling themselves European and Turkish oil traders while proposing "steep discounts".

The US Energy Information Administration's latest update in its June 2012 report about Egypt says this country's oil output stood at 710,000 barrels per day in 2011, while its daily crude consumption was 815,000 barrels in last year. With regard to this fact, Egypt needs crude import and Iranian stuck crude at the Egyptian port which was offered at a cheap price to sell immediately and is attractive to Cairo. There are also neither shipping nor insurance problems.

EU based insurance companies cover about 95 per cent of the world's ships. However, oil deals with Egypt could never compensate Iran's lost European customers.

Iran reportedly faces a huge amount of oil stuck and its oil exports have dropped to 1.1 million barrels per day from 2.3 million in 2011, because of the U.S. and EU's bilateral sanctions on the country's oil export and banking system.

Iran who has lost its European oil customers since early July (EU bought about 480, 000 Iranian barrels per day in past year), repeatedly announced that it is preparing to find new crude buyers and sign oil deal agreements with them.

Iran also launched new consortium with the participation of private companies three months ago to barter Iranian crude with foreign countries. Two days ago, Hassan Khosrojerdi, chairman of the union of Iranian exporters of oil derivatives, told the Mehr News Agency that the Iranian private sector has delivered the first shipment of crude oil by non-Iranian tankers to foreign buyers.

Lately, Iranian Parliament passed a law allowing domestic private firms to export 20 per cent of its oil exports.