Majlis Willing to Allow Cheaper Oil Trade via Iran Energy Exchange

Amember of the Majlis Energy Commission says parliament is willing to approve rules that allow the government to offer crude oil in Iran Energy Exchange at discounted rates.

Assadolla Qarekhani pointed to the existing rules that allow the Oil Ministry to sell crude oil 5% lower than the Persian Gulf FOB prices, saying the discount is not enough to attract oil dealers and buyers to IRENEX.

“Majlis is ready to let discount rates up to 15% to help improve oil sales via IRENEX,” Fars News Agency quoted him as saying.

Since last October the Oil Ministry has held offerings of crude oil on IRENEX as part of government efforts to involve the private sector and international companies in the key oil industry long under government control.

Role of the private sector in oil export has gained traction, particularly after the new US sanctions, which among other things, has hit the oil industry hard, aiming to paralyze the economy.

Nonetheless, the move has not produced the desired results because in the previous rounds the National Iranian Oil Company hardly managed to sell 1.1 million barrels of crude via IRENEX.

According to a Reuters report, Iranian crude exports dropped in June to 300,000 barrels per day or less after the United States tightened the screw on Tehran’s main source of income.

“Offering discounts to boost oil export is better than selling 400,000-500,000 pbd,” the MP argued.

As part of the current fiscal budget, the Majlis obliged the Oil Ministry to offer light and heavy crude oil on IRENEX on a weekly basis.