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Iran To Offer Modest Amount Of Oil To Local Buyers For Export

Traders in Tehran monitor the stock market at the stock exchange in the capital Tehran, August2018

Tehran's energy trading exchange announced on Saturday that two million barrels of oil will be offered to "private buyers" for bidding on June 11 for export.

Whoever wins the bid and buys the oil can export it to any foreign destination.

The United States has sanctioned all Iranian oil exports as of May 1 and industry data shows shipments have virtually come to a halt. This means any local Iranian company buying the oil offered has to basically sell it to a foreign customer who is willing to risk U.S. retaliation.

During international sanctions from 2011 to 2016, Iran was involved in all sorts of schemes to smuggle its oil to dubious foreign buyers. In the process, billions of dollars were embezzled by middlemen and a billionaire arrested for pocketing at least $3 billion was sentenced to death and languishes in prison.

The two million barrels will be offered at $67.32 a barrel, which is not a low price considering current international oil prices.

Last October Iran announced a program to offer oil on Tehran’s energy exchange or bourse to private buyers and its oil minister announced in December that those buyers “had no problem” selling the oil on international markets. But at that time U.S. oil sanctions had limited exemptions for a handful of countries.

The semi-official ISNA news outlet reported recently that in the past seven months 1.85 million barrels of oil was sold on to private buyers. This is an insignificant number given that Iran’s oil exports before the U.S. sanctions were more than 2mbd.

Other media have reported that the actual amount sold to private buyers has been less than 50,000 barrels in total.