Private firms tout Iran oil cheap to beat sanctions

Fri Jul 20, 2012 6:50am EDT
 
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By Jessica Donati

LONDON (Reuters) - Obscure private firms are offering Iranian crude oil at steep discounts to European oil traders as Tehran seeks ways to restore oil export flows hit by Western sanctions.

Traders who buy crude for European refineries say they are getting daily calls offering Iranian crude, sometimes accompanied by the promise of fake paperwork to disguise it as oil from a different origin.

Seeking to reverse a slump in exports caused by U.S. and European Union sanctions, Tehran last month scrapped a strict policy of marketing oil only through state National Iranian Oil Company (NIOC) to let private companies trade.

The sanctions, aimed at pressuring Iran to abandon what the West says is a nuclear arms program, have almost halted Iran's oil sales to Europe. The EU banned imports from July 1 and non-EU Turkey has slashed purchases.

Iranian oil initially destined for Turkey is now building up in at the Egyptian Mediterranean transit port of Sidi Kerir and is being offered in the European oil market by a growing number of small firms.

"They are all crazy offshore companies, mainly Iranian guys behind them," said a senior crude trader at a large state oil firm. He said most of the offers were made by telephone.

Not all sellers of the crude are based outside Europe. One offer seen by Reuters was posted on the online marketplace Alibaba by a firm based in Italy.

Salama Import and Export listed itself as a provider of both light and heavy Iranian crude grades with capacity to supply 1.2 million barrels per month for loading from Sidi Kerir.   Continued...

 
A speed boat passes by oil docks at the port of Kalantari in the city of Chabahar, 300km (186 miles) east of the Strait of Hormuz January 17, 2012. REUTERS/Raheb Homavandi