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Wednesday, July 12, 2006

Iran To Sell 20 Mil. Barrels of Oil Stores

By Yaser Anwar CSC of Equity Investment Ideas

Major OPEC producer Iran aims to sell a huge amount of oil stored on ships off its southern coast by mid-August, boosting exports during the third quarter, a top Iranian oil official said on Tuesday.

Hojjatollah Ghanimifard, executive director of international affairs at the National Iranian Oil Company (NIOC), said Iran hopes to take advantage of a seasonal increase in fuel consumption to shift the barrels.

"Considering the trend of rising demand in the market, we hope all our oil in floating storage will be sold by the middle of August," he told Reuters.

The oil official did not have an exact figure for the amount of crude stockpiled on tankers, but industry experts estimate it comes to around 20 million barrels -- a quarter of the world's demand in any given day.

Iran's exports during the third quarter are expected to swell above 2.4 million barrels per day (bpd) versus rates of below 2.3 million bpd during the second quarter when refinery maintenance sapped demand, he said.

The unwanted oil piled up on tankers during the second quarter, adding to volumes already in storage as Iran struggled to sell output of heavy crudes from new offshore fields, market sources said.

The Iranian crude in floating storage will not be discounted to guarantee swift sales, said Ghanimifard.
"The price trend shows that suppliers who have kept barrels floating have not lost this game," he added.

Oil's rally to well above $70 a barrel has paid automatic profits to those able to buy crude and store it for later use or sale.

Exports from Iran typically average about 2.4 million bpd, with some 60 percent heading to Asia and the remainder mostly to Europe.

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