March 15, 2019
All of Iran’s oil swap deals with its geographic neighbors have expired recently and none of them has been renewed. While it isn’t certain why, the suspicion is the renewed US sanctions.
Iran has had such arrangements with some of its fellow Caspian coastal states and with Iraq.
Under a swap deal, another country ships crude to Iran and Iran uses it in its northern refineries while selling an equal volume of Iranian oil at Kharg Island on the producing country’s account. Iran gets a fee for doing this and gets oil to its northern refineries without having to build another pipeline from the south. The other countries get their oil to market without having to build another pipeline.
Iraq started trucking 60,000 barrels of crude a day from its northern oilfields to the Kermanshah refinery when it could not pipe it across Kurdistan and Turkey to the Mediterranean. It is known that the United States objected to this.
Azerbaijan, Turkmenistan and Kazakhstan have all at times swapped oil with Iran, but have also complained about Iran’s fees for that service. The swaps have been erratic. But Abbas-Ali Jafari-Nasab, managing director of the Iranian Oil Pipeline Co., has said all those arrangements expired at the end of 2018 and none has been renewed.
