Foreign crude suppliers still distrustful of Greek banks

Foreign crude suppliers and traders exporting to the Greek market are continuing to display little, if any, confidence in Greek banks, despite the fact that the latter have been recapitalized for a third time. ELPE (Hellenic Petroleum) is experiencing this continued distrust first-hand, on a regular basis.

Companies such as Iran’s NIOC, the state-run oil company, Russia’s Vitol, as well as Saudi Arabian suppliers, all of which regularly trade with ELPE, are not accepting letters of gurantee issued by Greek banks for their dealings with the Greek refinery.

ELPE has been forced to have letters of guarantee issued by Credit Suisse as well as a Dutch bank, sources informed.

Despite the wider distrust, a visiting Iranian delegation led by the country’s deputy foreign minister Majid Takht Ravanchi did express an interest to increase trade with ELPE during a series of meetings yesterday with Greek government officials, including energy minister Panos Skourletis, economy, infrastructure, shipping and tourism minister Giorgos Stathakis, and alternate foreign minister Nikos Xydakis.

Ravanchi noted that he would like Iranian crude supply to ELPE to increase from the current level of two million barrels per month to three million. ELPE’s NIOC’s crude supply to ELPE had reached four million barrels per month prior to the western-imposed sanction on Iran, lifted early this year after being implemented in 2011. Ravanchi and his team also expressed an interest for greater Greek-Iranian cooperation in the petrochemical, LNG and renewable energy sectors.

In response, Greek officials suggested that more flexible credit terms by Iran and acceptance of letters of guarantees issued by Greek banks would help increase trade between the two sides.

ELPE is currently forced to make instant cash payments for orders delivered by NIOC as well as all other suppliers from abroad, including Russia’s Vitol, an old trading partner.