Vitol is Buying and Selling Iranian Fuel Oil

Vitol is one of the world's top 3 crude oil traders.

Vitol is buying and selling Iranian fuel oil in an apparent defiance of Western sanctions aimed at curbing sales of the Islamic Republic's crude and petrochemical products, according to an investigation by Reuters.

The Rotterdam and Geneva-headquartered oil trader said in a statement it is in compliance with all international laws on trade with Iran.

Vitol, one of the world's top three crude oil traders along with Glencore and Trafigura, was said to have bought 2 million barrels of Iranian fuel oil in August and offered it to Chinese traders, but could have acquired the cargo as early as this month in a ship-to-ship transfer off Malaysia.

According to the report, fuel oil was taken from National Iranian Tanker Company (NITC) vessel the Leadership onto the Vitol-chartered tanker Ticen Ocean sub-contracted from Titan Petrochemicals Group Ltd. (Titan) [HKG:1192].

Ship & Bunker reported earlier in the month that Titan vessels had been used to hide millions of barrels of crude oil from Western sanctions along the East Malaysian coast.

Industry sources were quoted saying the Ticen Ocean was subsequently replaced with China's Sino Shipping Holdings vessel The Speranza around September 13-14.

Special Blend

The cargo was blended in storage with fuel oil said to be sourced from Europe, and was offered to Chinese traders as a "special blend" commanding a $30 premium on Singapore's benchmark 180-centistoke fuel oil price.

"Because the offer was too high, our people didn't really carry on the talks," a Chinese executive was quoted as saying, adding that Vitol didn't appear to be in a hurry to sell the cargo.

Subsequent reports said it was offered at a $12 to $14 premium to Singapore benchmark prices, but a China-based trader said that "no one's agreed to buy the Vitol cargo," and that he declined the purchace because he "wasn't sure of the quality and specifications."

Vitol is not obligated to comply with the ban on trading Iranian product because Switzerland is not participating in the EU and U.S. sanctions against the country, but nevertheless was said to have stopped trading Iranian crude oil from its main European offices before the July 1, 2012 EU embargo deadline.

However Reuters sources said it has continued to deal in Iranian fuel oil from the Middle East.