ELPE (Hellenic Petroleum) plans to make a 100 million-euro payment to NIOC, the state-run National Iranian Oil Company, over the next ten days, as the first installment for debt worth 600 million euros. The outstanding amount resulted from banking restrictions caused by the western-imposed trade sanctions imposed on Iran in 2011.
The upcoming ELPE payment is one of the conditions set for the resumption of crude oil supply by NIOC to the Greek refinery, now that the trade sanctions have been lifted.
The first shipment is expected to be received within March, or early April. An imminent visit to Athens by NIOC officials is being planned for discussions on certain details concerning the new deal reached between the two sides. Further trading potential will also be examined.
Now set to once again be supplied Iranian crude, ELPE will need to cut back on supply from other sources. A reduction in crude orders from countries such as Libya and Iraq is likely, but final decisions concerning the countries and amounts still need to be made. These will depend on the crude prices to be offered by NIOC.
Based on the fresh deal just reached between ELPE and NIOC, the Greek refinery will be entitled to receive at least two million barrels of crude oil from Iran per month. This would cover 25 percent of ELPE’s needs. However, NIOC will need to offer competitive prices if orders of such levels are to be made by ELPE. The Iranian company will set its crude prices every month and ELPE will decide accordingly.
Meanwhile, Brent prices rose to 31.01 dollars a barrel last night, up 2.28 percent. Earlier in the day, Iran’s oil minister Bijan Zangeneh had announced that Tehran is ready to negotiate with Saudi Arabia, considering the current conditions in international oil markets. On the contrary, the WTI fell to 27.58 dollars a barrel last night, down by 1.29 percent.
The International Energy Agency (IEA) has forecast that OPEC will not reach an agreement with other producers to reduce oil output. According to the agency, the lifting of the sanction on Iran, combined with OPEC’s inability to reduce output will increase global oil reserves and prompt a further price fall.