Iran says 80% of oil contracts with Europe are operational

Some 80 per cent of Iran’s oil contracts with Europe are operational, Iran’s oil export chief said on Saturday according to the ministry’s news agency SHANA, adding Tehran was continuing talks with major European oil companies to sell more.

Asked about Iran’s oil contracts to sell 600,000 to 800,000 barrels per day to the European buyers, Mohsen Ghamsari, the director for international affairs at the National Iranian Oil Company, said: “80 per cent of them are operational.”

Last week, Royal Dutch Shell resumed purchases of Iranian crude, becoming the second major oil firm after Total to restart trade with Tehran after the lifting of sanctions, trading sources said and ship tracking data showed.

Iran has been trying to claw back its market share since international sanctions were lifted in January and regaining a major buyer such as Shell will further aid its cause.

Shell declined to comment.

According to shipping data, Shell fixed Suezmax tanker Delta Hellas to bring 130,000 tonnes of Iranian crude from Kharg Island on July 8 to continental Europe.

Trading sources said the cargo would unload in Rotterdam.

Shell repaid its outstanding debt to Iran from pre-sanction times earlier this year.

Besides Total, European purchases of Iranian crude have gone to refineries in Spain, Greece and Italy since the sanctions were lifted in January this year.

Tehran’s re-entry to the oil market has heightened tensions with arch-rival Saudi Arabia and attempts by OPEC to concoct a strategy to boost oil prices have been scuppered as a result.

Iran has resisted Saudi Arabia’s calls for output caps as Riyadh is itself aggressively expanding its buyer list ahead of an IPO for its state firm.

A production freeze deal collapsed in April when Tehran skipped a key meeting in Qatar that included non-OPEC members. OPEC delegates also failed to agree on a plan during their June meeting.

Major oil producers including Venezuela and Nigeria have been hit hard by a steep fall and protracted weakness in global oil prices.

Iran’s crude exports are now close to pre-sanctions levels of around 2.5 million barrels per day.