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Iran to resume Caspian swap scheme soon

Iran says it will soon resume a unique scheme to swap the crude oil of several Caspian states with its own in Persian Gulf ports – a scheme that had been halted since 2010.

Iran to resume Caspian swap scheme soon
(Tuesday, August 23, 2016) 13:39

Pirouz Mousavi, the managing director of the Northern Oil Terminals Company of Iran (IOTCO), told reporters that Iran will in the first phase resume swapping at least 100,000 barrels per day of Caspian crude within the next month, stressing that the volume will increase in the future.   

Mousavi added that Russia and Kazakhstan have voiced readiness to proceed with delivering their crude to Iran in its northern terminals and receive equal volumes in the south.

He said talks with other littoral countries over the project are underway, stressing that European oil companies active in Central Asia are interested in using the swap scheme with Iran to sell their oil to international markets.

Based on a multiple-year arrangement sealed with Russia, Kazakhstan, Turkmenistan and Azerbaijan, Iran imported an average of 100,000-barrels per day (bpd) of crude into its Caspian ports and in return supplied equivalent volumes on behalf of its partners to their clients in the Persian Gulf.  Iran would then use the oil it imported at its Caspian ports in its northern refineries and distributes the products across northern Iran.   

The scheme was halted in 2010 after when Iran raised its operating fees.  

The key partners in the arrangement were Vitol, Select Energy Trading, Caspian Oil Development and Emirates National Oil Co Ltd (ENOC).

Earlier in February, the ENOC announced that the scheme could be revived if Tehran offers the right operating fee.  

The ENOC said its unit Dragon Oil had recently signed a one-year agreement with its other partners and it would become clearer in the next six months if the swap deals with Iran would resume, Reuters reported. 

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