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EghtesadOnline: Close to one million barrels of oil have been sold on Iran Energy Exchange so far and plans are underway to continue the offers in the future, the head of international affairs at the National Iranian Oil Company said.

Saeed Khoshroo gave more details and said the second phase of offering crude oil on IRENEX was successfully carried out on Sunday when 700,000 barrels were traded at $64.97 per barrel. This is while 280,000 barrels at $74.85 were sold during the first phase on October 28.

Accordingly, eight cargos of 35,000 barrels and 20 cargoes of 35,000 barrels were traded during the first and second phases respectively, indicating a successful pilot program  offered on IRENEX.

Reported by the Oil Ministry's news portal Shana, the NIOC official said feedback was positive during the two phases and the company is awaiting opinions and constructive views of the private sector to improve the process and perform better in the future, Financial Tribune reported.

In Khoshroo’s words, an aggregate of 700,000 oil barrels within three orders—two orders of 245,000 barrels and one  210,000 barrels—worth 6.5 trillion rials ($46.42 million) were traded on the international ring of the Iran Energy Exchange on Sunday. He added that the payment period and the settlement of the bill was extended from 50 days to 60 days after cargo delivery.

NIOC has managed to provide a proper platform for the private sector to purchase crude oil through IRENX and there is no easier way to buy oil other than buying it directly on the bourse.

According to reports, crude oil was offered at base price of $79.15 and was sold at $74.85 per barrel during the first trading session, while the base price during the second offering was $71.59 and $64.97 was the final trading price. 

Decline in Int’l Crude Prices 

Noting that the price change is due to the decline in international oil prices, he said, “Oil prices have decreased by about $15 compared to the release time of the first announcement on IRENEX and this apparently affects crude prices in energy bourse as the final price is adjusted according to latest oil prices at the time of delivery.”

Referring to the role of the private sector, Khoshroo said private companies should do their best to identify target markets and acquire bank guarantees. 

As per earlier announcements, 20% of crude oil sales are in rial and the remaining in foreign currency. Rial settlements will be done in cash based on the Central Bank of Iran’s Sana system before delivery while forex settlements will be on credit after delivery by presenting valid bank guarantees from banks approved by NIOC.

Sana rates are average exchange rates at which foreign currencies are traded at bureaux de change on any given day.

In addition, applicants should pay 10% of the order’s value in rial to the Central Securities Depository of Iran as pre-payment before becoming eligible to trade.

IRENEX managing director, Ali Hosseini, earlier told SENA that foreigners can also apply for trading codes and buy crude on the bourse in Tehran. He said more than 100 trading codes have been given to overseas entities. 

Iran had made several unsuccessful attempts in the past to offer crude oil on the stock market to involve the private sector and international buyers in the state-controlled oil sector -- the lifeblood of its economy. 

The new measure has been touted by senior officials as an effective way to frustrate US sanctions. NIOC has said it will offer one million barrels of oil on the stock market each month. 

According to IRENEX, the identity of traders will remain confidential, but efforts will be made to render the process transparent.


Iran Energy exchange Oil Trade Energy Bourse