Iran is going to offer up to three-year oil future contracts for certain international buyers in an effort to offset the impacts of U.S. sanctions on its oil exports.
The United States told all Iranian crude oil buyers that they had to wrap up crude oil purchases by November 2018, but it later granted eight countries waivers to the sanctions. Still, Iran has been defiant regarding the sanctions, and has continued to ship crude oil to several countries including China.
Iranian Vice-President Es'haq Jahangiri said on Tuesday that “powerful economies” interested in buying Iranian oil will be provided with long term contracts at pre-determined prices.
“Any powerful country that wishes to work with Iran can pre-order Iran’s oil for the next two to three years,” Jahangiri said.
The call to foreign buyers sent a clear message that Iran is not yet ready to sit idle while the US strives to bring iran’s oil exports to zero. “Any powerful country that wishes to work with Iran can pre-order Iran’s oil for the next two to three years,” Jahangiri said.
Iran has also tried its hand at selling its crude oil on the country’s stock exchange, the IRENEX.
“Offering oil and gas condensate in the international ring of IRENEX has become a legal obligation, and it will definitely be a lasting move,” Amir Hossein Tebyanian, representative for the National Iranian Oil Company told the Tehran Times earlier this week.
Iran has had limited success at finding buyers for its crude on this exchange, leaving Iran in a lurch coming off of its pre-sanctions $100+ billion in annual revenues from its crude oil sales.
Iran promised reliability to any foreign buyers of its crude, stating that it had maintained its oil production at 3 million to 4 million bpd despite the sanctions. According to OPEC’s most recent Monthly Oil Market Report, however, Iran’s average crude oil production in May was 2.37 million bpd according to secondary sources. Iran has not provided directly communicated oil production figures to OPEC since some time in 2018.
