Azernews.Az

By Aynur Karimova

The removal of Western sanctions on Iran, the fourth country in the world for its proven oil reserves, has forced the energy-consuming countries to rush to the Iranian market.

The Hellenic Petroleum, the biggest oil refiner of Greece, has become the first European refiner to restart trade relations with Iran after the post-sanctions era.

The company, which was a major buyer of Iranian crude, agreed to purchase crude oil from the National Iranian Oil Company on January 22.

The agreement came after Iran's Deputy Oil Minister Amir Hossein Zamaninia and his Greek counterpart Panos Skourletis met in Athens on January 22.

The two ministers also attended talks between executives from Hellenic Petroleum and NIOC, a meeting reported by Reuters on January 18.

Under the deal, the refiner will start buying oil from Iran immediately and will settle its multi-million euro outstanding debt to NIOC, Hellenic Petroleum reported.

Hellenic Petroleum is estimated to owe Iran around $550-600 million for oil it bought before the sanctions but was unable to pay when the international embargo was imposed.

"The deal was achieved after consecutive meetings in Athens and Tehran," Hellenic Petroleum said. "The deal is beneficial for both sides."

After meeting, Skourletis told Reuters that Iran believed Greece could be a conduit for re-entering Europe's oil market.

"They (Iran) are positively disposed towards Greece and think that Greece can be the European conduit for them to re-enter the market," he said, adding that the two countries had traditionally enjoyed close relations.

Hellenic Petroleum's crude purchase from Iran accounted for about 20 percent of the southeast European country's annual crude oil imports before sanctions were imposed on Tehran in 2011.

Iran, which enjoys about 158 billion barrels of oil reserves, used to sell as much as 800,000 barrels per day to European refiners in Italy, Spain and Greece before the sanctions over its nuclear program were imposed.

Tehran ordered a 500,000-bpd increase in its oil output, of which 200,000 bpd will go to Europe, after the sanctions were removed on January 16.

However, the European companies and trading houses are not rushing to purchase Iranian oil because of legal uncertainties over the lifting of sanctions that are likely to take weeks to clarify.

Meanwhile, Iranian media reported that Japan plans to extend a contract to purchase crude oil from Iran.

Shana news agency – affiliated to Iran’s Ministry of Petroleum – has reported that Japan’s contract will be extended until April 2017. The volume of oil that the country will purchase from Iran will also increase from the current level of 110,000 barrels per day.

But, no figure was nevertheless provided on how much this will increase, Press TV reported.

Japan was one of the key clients of Iran’s oil before the US-led sanctions were imposed on the Islamic Republic in 2012. Iran also hosted several leading Japanese companies in its oil and gas projects before the sanctions were put into place.

The prospects for the removal of the sanctions against Iran encouraged the Japanese officials to look for the avenues to return to the previous status of oil relations with Iran.

On January 26, for the first time after the removal of international sanctions on Tehran, a Japanese tanker is scheduled to load oil products at Iran’s Kharg oil terminal.

IRNA news agency reported that Japanese companies, which had proper cooperation with Iranian oil industry during the sanction-era, will be first to carry Tehran’s oil after the removal of sanctions.

Chinese tankers are also expected to resume carrying Iran’s oil shipments as of January 26 after Japanese vessels.

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

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