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Iranian oil headed to Europe

More of Iran's oil on the market could add to existing supply-side pressures.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   March 7, 2016 at 6:43 AM
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TEHRAN, March 7 (UPI) -- The Iranian Oil Ministry said Monday a tanker of crude oil was on its way to Europe for the first time since sanctions eased after July's nuclear deal.

SHANA, the oil ministry's news website, said tanker Monte Toledo left port for an undisclosed European consumer. The shipment marks the first from Iran since mid-2012, when the European Union enacted sanctions on the country in response to its controversial nuclear program.

Sanctions pressures eased in early 2016 following a nuclear deal signed in July between Iran, the five permanent members of the U.N. Security Council, plus Germany. Full trade in Iranian crude oil remains restricted because some financial maneuvers are still blocked by U.S. sanctions.

Iranian President Hassan Rouhani was quoted by SHANA as saying more oil exports "will be added soon" to the Iranian trade books.

Iran has reached out to restore ties with European energy companies eager to return to an opening oil and gas sector. In February, Royal Dutch Shell, one of the largest energy companies in the world, said it starting paying back a multi-billion dollar debt to the state-run National Iranian Oil Co. The debt was incurred because reimbursement opportunities were blocked by sanctions.

Iran's finance minister, Ali Tayebnia, said arrangements are in place for export volumes of up to 2 million barrels per day.

The potential for more Iranian crude oil on the market has put negative pressure on crude oil prices weighed down by an oversupplied market. Iranian officials brushed off proposals from rival producers to freeze production at January levels.

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