Mediterranean refiners eye Iranian crude imports - Energy Intelligence

London, (Quantum Commodity Intelligence) – Oil traders say Mediterranean refiners would happily buy Iranian crude if talks in Vienna to salvage the 2015 nuclear deal, lead to the lifting of US sanctions, according to a report compiled by Energy Intelligence.

The report, published Wednesday, said that representatives of at least one company has sent representatives to Tehran in May to discuss resuming purchases.

If a deal is reached between Iran and the international community before Iranian elections on June 18, Energy Intelligence's Research & Advisory service sees Iranian crude exports rising by 350,000 barrels per day by August and another 650,000 bpd by early 2022, from around 900,000 bpd now, under a base-case scenario.

Under this scenario, Washington and Tehran would return to compliance with the nuclear deal in the coming months and the US would lift some sanctions on Iran's oil, banking and other key commercial sectors.

Previous buyers

The Energy Intelligence report noted Europe was a key market for Iran back in 2017, the year before US sanctions came into force, noting many refineries were configured to run Iranian crude and monthly imports sometimes averaged more than 900,000 b/d.

Demand primarily came from Turkey, Italy, France, Greece and Spain.

One of the former frequent European buyers visited Tehran two weeks ago for talks with National Iran Oil Co. (NIOC), which is expected to target Mediterranean refineries if and when sanctions are lifted.

"I would say yes, (we would take Iranian barrels)," said a European refiner. "Although every decision is based on economics and an attractive price. NIOC's main focus is of course to get back market share, so I think they may well discount to achieve that."

Until a deal is struck, however, European refiners will remain very focused on the long list of Iranian entities blacklisted by the US Treasury's Office of Foreign Assets Control.

These include NIOC and Iran's oil ministry. Such entities would need to be cleared before refiners can safely return to buying Iranian oil.

"There are a lot of sanctions to get through, so it's not as if anyone would lift (Iranian crude) on day one," a Mediterranean refiner told Energy Intelligence.