Tehran hopes to counter U.S. sanctions by selling oil directly to private buyers rather than foreign clients
Iran sold oil to private buyers through its energy exchange for the first time on Sunday, as part of its efforts to counter the imminent return of U.S. sanctions.
Only 280,000 barrels were sold out of one million offered, and went for $74.85 per barrel, more than $4 below the initial asking price.
The identity of the buyer remained a secret, with the conservative Fars news agency saying only that a conglomerate of private firms had made the purchase through three brokerages.
The U.S. is set to re-impose sanctions on Iran’s oil industry on Nov. 5, following President Donald Trump’s decision to walk out of the 2015 nuclear deal in May.
The plan to sell oil to private companies on the energy exchange was floated back in July by first vice-president Eshaq Jahangiri with the aim of “defeating America’s efforts … to stop Iran’s oil exports.”
The government hopes selling to private buyers, rather than direct to foreign clients, will make it harder for the U.S. to monitor and stop its sales.
“With the imminent return of a new wave of sanctions, the government is determined to utilize the maneuvering ability of the private sector to sell Iran’s oil and find new markets,” Hamidreza Salehi, director of Iran’s energy exports federation, told semi-official news agency Iranian Labor News Agency (ILNA).
Some estimates show Iran’s crude exports have already dropped by a third since May when it was selling around 2.5 million barrels per day.
The government currently intends to offer oil on the energy exchange once a week, according to Fars. Its initial base price on Sunday was $79.16, but it received limited bids as much as $16 lower as trading began, the exchange’s website showed.
The final buyer only emerged after the base price was dropped to $74.85 in the closing hours.
The head of Iran’s securities and exchange organization, Shapour Mohammadi, promised on Friday that the identity of the buyer would not be revealed.