Jul 23, 2019 Last Updated 13:32 PM EDT

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Iranian Crude Oil Exports To Europe Resumes, Breaking Deadlock Since Mid-2012

Mar 07, 2016 09:23 AM EST

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The Monte Toledo, an oil tanker, loaded with one million barrels of Iranian crude oil, has landed in Europe on Sunday, in just 17 days. The tanker appears as the first to deliver Iranian crude into Europe since mid-2012 following sanction on oil exports centering row over its disputed nuclear program. The sanction has been lifted in January as part of a major deal ending a decade of sanctions.

A refinery, owned by Cia.Espanola de Petroleos, near Algeciras, a few miles away from Gibraltar, appears as the first recipient of Iranian crude oil in Europe. The Monte Toledo has pumped crude oil to shore through 21-inch floating hoses connected to a giant buoy and a 1.8-kilometer submarine pipeline. Soon after starting the pumping to shore, Iranian President Hassan Rouhani has declared in Tehran that more oil exports will take place soon, reports Bloomberg.

Other tankers with Iranian oil are also heading towards different ports in Europe. 29 vessels have been loaded with crude oil from Iran during February. Of them, three are heeding towards Europe, according to a report published in Daily News.

The Eurohope has been sailing towards the Rumanian oil port of Constanta. Meanwhile, the Atlantis has been voyaging all the way to France. However, the third one, the Distya Akula, is anchored at the mouth of the Suez Canal while heading towards a Mediterranean port, reports FuelFix.

The Monte Toledo and other vessels may be considered as the 'Goodwill Envoys' of Iran into the European oil market. Iran has been estimated to export around 1.4 million barrels per day in February, surging from average export of 350,000 barrels per day during 2015, according to Petro-Logistics SA, a Geneva-based tanker-tracking firm.

The increase in oil export falls short from Tehran's earlier commitment of exporting 500,000 barrels per day. However, oil analysts observe strong signs that export of Iranian oil into Europe will find momentum during the current month.

In addition to higher export volumes in March, analysts predict more countries from Europe and Asia will be added to the destinations list of Iranian oil tankers, cites Seth Kleinman, head of energy research at Citigroup in London.

However, hurdles are still hovering around the Iranian oil industry since some buyers find it hard to transfer payments for Iranian crude due to banking restraints. Furthermore, National Iranian Oil Co. offered to swap crude for gasoline to boost up export earnings, which may also intensify the oil export volume.

Export of Iranian crude oil to Europe finds several hurdles centering banking restraints since some buyers find it hard to transfer payments. Defeating all odds, The Monte Toledo, the Iranian oil tanker has appeared as the first to deliver Iranian oil to Europe on Sunday since mid-2012. Iranian President Hassan Rouhani has declared for oil exports in larger volumes in the near future, which has also been echoed by oil analysts and industry insiders.

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