Iran open account at European bank to receive money from exporting petrochemical products to Europe

EU, Iran crude oil statistics, 2015 - 2009

Iran opened an account at a Spanish bank aiming to receive money from exporting petrochemical products to Europe, said Mehdi Sharifi Niknafs, Managing director of Iran’s Petrochemical Commerce Company.

For the first time after five years, Petrochemical Commerce Company’s account was activated at European banks, Niknafs said on January 2.

He did not refer to any details about the Spanish bank, but said that the two sides have signed an escrow account agreement despite all the international restrictions.

Based on the agreement, which has been endorsed by the Spanish central bank, Petrochemical Commerce Company will be able to receive money from exporting petrochemical products to different countries of the world, Niknafs explained. Niknafs said earlier that with lifting of bank, insurance, and transport problems, exporting of petrochemicals will be facilitated and costs will reduce notably.

Recently, senior representatives of Export Development Bank of Iran (EDBI) and Spanish bank Aresbank met in Tehran to see how the two could establish brokerage banking relationships, according to the public relations department of EDBI. The meeting was attended by Luis Casado and Fekri Sinan, respectively Aresbank’s manager director and deputy manager director, and Dr. Salehabadi and Mohammad Hossein Mehrani, respectively manager director and international affairs manager of Export Development Bank of Iran.

According to Casado, Iran assumes great importance in Aresbank’s long-term planning. Also, in the session, Dr. Salehabadi said sanctions against Iran are due to be removed soon and expressed his bank’ readiness to open banking relationships with all banks across the world.

Iran holds the world's fourth-largest proved crude oil reserves after Venezuela, Saudi Arabia and Canada, and the world's second-largest natural gas reserves. Despite the country's abundant reserves, Iran's crude oil production has substantially declined, and natural gas production growth has been slower than expected over the past few years. International sanctions have profoundly affected Iran's energy sector and have prompted a number of cancellations or delays of upstream oil and gas projects.

The United States and the European Union #EU enacted measures at the end of 2011 and during the summer of 2012 that affected the Iranian energy sector more profoundly than any previously enacted sanctions. The sanctions impeded Iran's ability to sell oil, resulting in a near 1.0-million b/d drop in crude oil and condensate exports in 2012 compared with the previous year.

Iran's oil and natural gas export revenue was $118 billion in the 2011/2012 fiscal year (ending March 20, 2012), according to the International Monetary Fund (IMF) In the 2012/2013 fiscal year, oil and natural gas export revenue dropped by 47% to $63 billion. The IMF estimates that Iran's oil and natural gas export revenue fell again in the 2013/2014 fiscal year by 10% to $56 billion.1 The revenue loss is attributed to the sharp decline in the volume of oil exports from 2011 to 2013. Iran's natural gas exports increased slightly over the past few years. However, Iran exports only a small volume of natural gas, because most of its production is domestically consumed.