Iran plans to sell 300,000 barrels of crude oil a day to European customers now that Western sanctions have been lifted, the country’s oil minister told state media Saturday.
It is the first time Iran’s top oil official, Bijan Zanganeh, has said how much of its new exports would be headed for Europe, a major market for the Islamic Republic before much of the West imposed sanctions in response to Tehran’s nuclear program in 2012. Iran is trying to boost its oil exports by 500,000 barrels a day in the next few months, with much of the rest going to Asia.
The new details of Iran’s plans demonstrate how the world’s biggest energy producers–among them Saudi Arabia, Russia, Iran itself and the U.S.–are pushing hard to grab their share of the European energy market.
Saudi Arabia last week again slashed its prices for European buyers of oil, including a type similar to the crude that Iran produces. U.S. producers are planning their first shipment of liquefied natural gas to Europe, eating into Russia’s main market for gas exports.
Competition for market share has weighed on oil prices, which fell to $27 a barrel in January– a 12-year low–and have hovered around $35 a barrel in recent days. Global demand hasn’t kept pace with the vast new supplies from Russia, Saudi Arabia, Iraq and now Iran.
Mr. Zanganeh’s comments, reported by state-run oil news agency Shana, came amid signs that European oil-tanker companies were finding ways to ship Iranian oil despite remaining American sanctions on Iran related to terrorism and the country’s human-rights record.
Glencore PLC, the Switzerland-based mining and trading giant, became the first Western company to load Iranian oil on Friday night, shipping company officials said. A tanker chartered by Glencore AG loaded 80,000 metric tons of fuel oil at the Iranian oil-products terminal of Bandar Mahshahr late Friday and left bound for the United Arab Emirates, according to shipping officials and ship-tracking website FleetMon.
Many shipowners have been reluctant to carry Iran’s oil because the remaining American sanctions prohibit transactions in dollars with Iranian entities. Most oil is paid for in dollars, and many European insurers use the American financial system or pool resources with American companies, making it difficult to insure vessels.
One British insurer, whose clients include a tanker owner booked to carry Iranian crude, said he wouldn’t oppose such shipments, but warned that accidents may not be fully covered.
Glencore’s shipment is the first in a wave of European purchases of Iranian oil, though the others have yet to be loaded.
Mr. Zanganeh said Total SA, the French oil company, will start importing 160,000 barrels a day of oil starting on Feb. 16. Total has chartered a 2-million-barrel tanker to load crude next week, according to shipping officials. Total has previously said it would buy 150,000 to 200,000 barrels a day, but declined to comment on its planned loading next week
Mr. Zanganeh added that Total is also interested in Iran’s South Azadegan field—which is close to Iran’s Western border with Iraq—and Iran’s LNG export project.