Azerbaijan Starts Oil Swap with Iran

TEHRAN (FNA)- Azerbaijan started to export its oil to the world’s markets through Iran last week, adding that the country is delivering 5,000 to 10,000 bpd of crude oil to Iran’s Caspian port of Neka, an Iranian oil ministry official said.

This is the result of the efforts made by the National Iranian Oil Company (NIOC) in the international arena, Managing director of Iranian Oil Terminals Company Mousa Souri told PIN.

He further stated that Azerbaijan delivered the first cargo to the National Iranian Oil Terminals Company (OTC) last week.

The deal was prompted by the suspension of Azeri oil deliveries to world markets through the Baku-Tbilisi-Ceyhan pipeline and by rail following the explosion of a railway bridge in Georgia earlier this month.

Azerbaijan oil supplies through Georgia were also cut due to a military conflict between Moscow and Tbilisi prompted by a Georgian attack on the independence-seeking South Ossetia.

The military conflict between Russia and Georgia led to the closure of the Baku-Supsa oil pipeline which normally transports 90,000 barrels of crude daily from the Azeri capital to the Georgian port in the Black Sea.

According to news reports, Azeri oil is delivered from Sangachal Terminal in the south of Baku to the Iranian port of Neka in the Caspian Sea. An equivalent amount of crude oil is reportedly then provided by Iran at Khark Island in the Persian Gulf.

Souri further stated that at present central Asian countries crude oils are being swapped for Iranian oil in its terminals on the Persian Gulf. Oil swap deals with Iran have climbed 50,000 bpd to about 100,000 bpd and it is expected to rise 200,000 bpd within next few years.

He explained that setting up oil terminals in the Persian Gulf and Caspian Sea are a strategic plan of Iran’s oil industry to increase security and continue oil exportation of the country.

“Jask oil terminal is among the projects at a cost of 3.5bln US dollars that has made a 10 percent progress so far,” he said.

“It is expected to be operational by next three to five years.”

Azerbaijan recognizes that Iran enjoys strategic benefits which make the new arrangements advantageous. Most important of these are the location of Iran with its ability to access free waters via the Persian Gulf, and the existence of oil terminal facilities in the ports of Neka, Amirabad and Anzeli.