Iran has announced the resumption of swaps of crude oil for petroleum products with the Caspian littoral states – Turkmenistan and Kazakhstan, after a five year suspension, reported Press TV. The National Iranian Oil Company (NIOC) has signed a swap deal with an unknown international firm. The first oil cargo is expected to arrive within days, most likely from Kazakhstan.
The port of Neka in northern Iran is likely to be reopened for import flow as it has sufficient capacity for crude from the Caspian states of Turkmenistan, Kazakhstan, Azerbaijan, and Russia, which is to be swapped for oil products, primarily natural gas liquids.
According to Mehr News Agency, the swaps are driven by rising fuel demands in the domestic marketplace, prompted by the winter weather. “In order to reduce the cost of transporting petroleum products from the south of the country to the north, oil swaps have been launched with the participation of the private sector and the oversight of the government,” Ali Asghar Sajedi, the Managing Director of the National Iranian Oil Engineering and Construction Company (NIOEC) said.
Under the 1997 Caspian oil swap arrangement, Iran received crude from Azerbaijan, Kazakhstan, and Turkmenistan in the port of Neka for processing, and delivered an equivalent volume to the clients of those countries in the Persian Gulf in exchange.