Iran’s private sector and hopes to circumvent oil sanctions



Iran says a consortium of Iran's private sector companies will take on 20 percent of the country's total crude oil exports as international sanctions against the Iran's oil and banking sectors took effect on July 1.
According to Mehr report, Oil Ministry and Central Bank have agreed to transfer the exports of some 500,000 barrels of crude oil (about 20 percent of Iran' total oil export) to the private sector as a way to circumvent the sanctions.
With regarding this fact that Iran's private sector has never sold any oil, yet, then it's unclear that how can they succeed in organizing oil export, to ship, to get insurance and re-insurance, to get the money and the mechanism of transferring that to inside country.
On the other hand, Iran has started offering oil in Kish Exchange since last year, but after 8 times failed attempts to sell crude oil, it withdrew from this plan.
Hassan Khosrojerdi, the head of the Iranian Oil, Gas and Petrochemical Products Exporters Union told Mehr News Agency that Iran has reached the agreement with some European refineries to keep oil export to them, without saying the name of the mentioned refineries.
EU has banned Iran's oil purchase since July 1, but Italian Eni and Spanish Reposol companies have about $1.6 billion debts from Iran because of joint oil contracts in past, then the Union has permitted them to keep oil purchase from Iran to close Iran's debts until Sep.15, an European official told Trend anonymously last week.
Regarding these facts, Iran's private sector's capability to sell oil crude is doubtable and the EU, customer of 18 percent of Iran's oil will never import Tehran's oil, excepting Eni and Repsol. On the other hand, these companies will never pay any money vs Iran's oil purchase, only Iran's debts will be paid off.
Iran's oil exports may have halved since last month compared to India's 300,000 bpd, China's below 500,000 bpd, Turkey's 160,000 and South Africa's 65,000 bpd oil purchases from Iran during this month. Japan and South Korea do not plan to import Iran's oil during current month, but they will restore their imports in future significantly less than the amount of their purchase in 2011.
It seems Iran does not have any alternative, at least in case of both using private sector to oil export and restoring oil sell to EU, which bought about 450 mbp Iran's oil in 2011.
Oil exports ensure a half of Iran's government revenues, while crude oil and its derivatives account for nearly 80 percent of Iran's total exports.

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