Greece refiner agrees to resume Iran oil purchase

Greece’s main oil refiner Hellenic Petroleum has reached an agreement with Iran for importing crude oil now that international sanctions have been lifted on Tehran.

“Hellenic Petroleum (HELPE) and the National Iranian Oil Company (NIOC) have reached a long term agreement…” that “includes cooperation for the supply of crude oil, with immediate start of deliveries,” HELPE said in a statement.

The agreement was reached following a meeting between Iran’s deputy petroleum minister Amir-Hossein Zamaninia and his Greek counterpart Panos Skourletis in Athens on Friday.

The Greek refiner was a major buyer of Iranian crude, which accounted for about 20% of its annual crude oil imports before sanctions were slapped on Iran in 2011.

Under the agreement, HELPE will start buying oil from Iran immediately and will also settle its nearly $550-600 million outstanding debt to NIOC.

Skourletis said Iran believed Greece could be a conduit for re-entering Europe’s oil market.

“They (Iran) are positively disposed towards Greece and think that Greece can be the European conduit for them to re-enter the market,” he said. “They (Iran) said that the debt (settlement) can open the way so that our cooperation is boosted.”

Before the imposition of sanctions, Iran used to sell as much as 800,000 b/d to European refiners in Greece, Italy and Spain and Greece.

Last Monday, NIOC ordered a 500,000 b/d oil output hike, of which 200,000 b/d will go to Europe.

On January 16, Iran’s landmark nuclear deal with six world powers, reached last July, went into effect, leading to the lifting of US, UN and European sanctions on the country.

Iran is expected to add 500,000 b/d to its oil exports after the sanctions are lifted. It will continue to raise exports to 1 mb/d six months after.

Iran exported 2.3 mb/d-2.5 mb/d of oil before US and European sanctions targeting its energy sector cut the sales by half in 2012. Saudi Arabia, Russia and Iraq ramped up production to replace the Iranian oil.

Iranian officials have urged OPEC members to make room for Iranian oil when the country returns to the pre-sanction export levels.