Iran restarts relationships with European oil clients

Iran will start sending 300,000 barrels a day of crude to Europe 54 percent of the total it shipped before authorities on the continent put an embargo in place.

Paris-based Total SA has agreed to buy about 160,000 barrels a day starting on Feb. 16, the ministry of oil’s Shana website reported, citing Oil Minister Bijan Namdar Zanganeh. The company also expressed interest in developing the South Azadegan oil field in western Iran near the border with Iraq and in a liquid natural gas project, Shana reported. Total asked for the necessary information to submit a proposal for the LNG plant.

The move shows Iran’s determination to fulfill promises to re-establish its relationship with European clients who halted purchases in 2012 after the European Union imposed an embargo on imports. The ban ended last month when Iran completed the conditions of a nuclear deal with world powers.

Europe, excluding Turkey, imported 550,000 barrels a day of Iranian crude before the sanctions, according to data compiled by Petromatrix. Spanish refiner Compania Espanola de Petroleos and Russia’s Lukoil PJSC have also provisionally booked cargoes of Iranian crude to sail from Kharg Island to European ports in the next two weeks, according to shipping reports compiled by Bloomberg.

No agreement has been signed yet with Italian oil company Eni SpA, Zanganeh said. Italian officials are expected in Tehran soon to sign an oil purchase agreement for about 100,000 barrels a day, he said. Italy’s Saras SpA refinery is also interested in buying 60,000 to 70,000 barrels a day.

European companies are already reaping benefits to the end of the economic freeze on Iran. President Hassan Rouhani’s signed an agreement to buy 118 Airbus Group SE aircraft, including 12 A380 super jumbos, during a visit to Paris last month. PSA Peugeot Citroen agreed to upgrade a Tehran car plant.

FT