10 steps in purchasing oil at IRENEX: Report

MNA – Purchasing oil from Iran Energy Exchange (IRENEX) includes 10 steps, which are usually announced a week before offering oil at the international ring of the named exchange market by National Iranian Oil Company (NIOC).

Offering oil at IRENEX is a new method that Iran has chosen for selling its oil. The customers can apply for buying oil at the exchange market after registering a firm and having their qualifications approved by an affiliated Iranian organizations.

NIOC offers at least 6 million barrels of oil and gas condensate at IRENEX per month, a procedure which includes 10 steps.

Step 1: NIOC makes an announcement at http://bourse.nioc.ir identifying the base price, date of offering, type of the offered cargoes and also their delivery time span. The least volume of orders is 1,000 barrels for delivery on land and 35,000 barrels for delivery on sea.

Step 2: Before entering the purchase procedure, the customers are required to pay 6 percent of the total value of their orders in rial or in any other exchange rates, the rates would be set via at the Central Bank of Iran (CBI)’s online Sana system (accessible at sanarate.ir, a website that records daily forex trade from across the domestic exchange bureaus).

Step 3: Oil and gas condensate cargoes will be offered at IRENEX in accordance with the made announcements, creating a competition among the customers.

Step 4: Customer’s made orders will be screened at the international ring, with NIOC allowed to set the base prices. The state-run body and the customers will reach an agreement on a definite price and the deal will be done.

Step 5: NIOC defines a time span for delivery of the purchased cargoes to the customers. The customers are then required to select a 5-day-period of the set time span and announce it to NIOC to have their purchased cargoes loaded.

Step 6: NIOC will select a day from among the set 5-day-period as the definite date of having the cargoes loaded.

Step 7: At most, for ten days before the set loading date, the customers must introduce their ship, which meet international standards, at www.nioc-intl.i.

Step 8: NIOC ratifies the introduced ships and issues a final but interim bill.

Step 9: The customers decide one of the two possible options for having the issued bill cleared: the whole price will be paid in cash or via credit.

In the second payment method, NIOC receives a banking guarantee worth 110 percent of the total value of the purchased cargo and gives the customers 90 days to clear their dues.

Step 10: At the set date, finally, the purchased cargoes will be loaded and delivered to the customers.