Iran’s first post-sanction oil shipment to Greece expected in Feb

According to media reports, Greek oil refiner Hellenic Petroleum and Iran’s state owned National Iranian Oil Company (NIOC) agreed to restart their trade relations on January 22. Accordingly, Hellenic Petroleum will begin importing Iranian crude oil as soon as possible and the refiner will also clear its debt to NIOC. Hellenic Petroleum would be the first European company to begin oil trading with Iran since sanctions on Iranian oil were lifted on January 16.

Before the sanctions were imposed, Hellenic Petroleum was a major buyer of Iranian crude. Greece had reportedly been sourcing around 20% of its annual crude oil imports from Iran before sanctions were imposed. Hellenic Petroleum was unable to pay its debts, which amounted around $550-600 million, to NIOC when international sanctions were imposed on Iran, limiting Iranian access to the international banking system.

Previously, Iranian officials also reported that NIOC is preparing to ship at least 1 million barrels of light crude to the European Union (EU) as early as February.

Following to removal of sanctions on oil exports, Iran reported that they will export an additional 500,000 barrels a day of oil per day (bpd) in the next few months and an additional 1 million barrels a day within a year. Most of this allocation will be supplied to Europe while the remainder will be directed to Asia.

Iran is reportedly trying to regain its market share lost during the sanctions period while also aiming to remain competitive with Russian and Saudi Arabian oil as these countries have been aggressively discounting crude oil exports to Europe due to growing supply concerns stemming from Iran’s return to the market.

Although other European oil companies such as Total, Royal Dutch Shell PLC and Cepsa are said to be in talks to buy Iranian crude, sources report that European oil companies remain wary of purchasing Iranian oil as legal uncertainties over the lifting of sanctions remain in place.