Iranian expert: sale of oil at Energy exchange - useful during sanctions

Business Materials 8 April 2019 12:27 (UTC +04:00)

Baku, Azerbaijan, April 8

By Elnur Baghishov – Trend:

The sale of oil in Iran's energy exchange is a useful solution during a time of sanctions, Iranian energy expert Sadegh Mardani told Mehr News Agency, Trend reports.

Mardani stated that it would be best for the sales at the energy exchange to be as transparent as possible.

Noting that the lack of transparency in oil sales during the period of sanctions is wrong, Mardani said that Iran's Oil Ministry can take steps in order to form new conditions for the receipt of revenue from oil sales and the shipping of sold oil (among other aspects), aimed at making sure that the processes are transparent for the government and not for those outside of inner governmental circles.

According to him, this must be done so that Iran manages to always keep track of the oil revenues.

According to the expert, Iran can make it difficult for the countries that have imposed sanctions to monitor Iranian oil sales. For example, it may be possible to create variety in the delivery of oil cargoes by transporting the oil through East Asian waters or a ship-to-ship cargo transfer. It may also be possible to create variety in the receipt of oil revenues, by switching to Iranian rials.

"There is a great risk in using other methods for selling oil during a time of sanctions, as sanctions had been imposed on many companies engaged in selling oil abroad during the past sanctions," he said.

On the other hand, it may be possible for mediators to use the sanctions as an excuse in order to avoid getting involved in the process of oil sales, Mardani added.

Mardani said that, the Oil Ministry apparently intends to use the methods previously applied by the National Iranian Oil Company (NIOC) for the sale of oil during sanctions – as very few people were involved in oil sales back then, and level of security was high.

However, he also noted that a number of problems, most notably problems with people evading their responsibilities, were also witnessed in this field in the past. Therefore, a number of reforms should be introduced, and oil sales need to be made transparent overall.

The US imposed sanctions on Iran in November 2018, but granted waivers to 8 countries in order to meet their consumer energy needs for a 6-month period, with the said period is ending by late April 2019.