Iran will receive gasoline from Vitol and Glencore in trade for bunkers according to a media report.
Oil traders have entered into what has been described as rare barter deals with the National Iranian Oil Company (NIOC), and are supplying Iran with gasoline in exchange for high-quality fuel oil destined for Fujairah bunker markets.
The media reports, citing traders said to be familiar with the matter, claim trading giants Vitol and Glencore have negotiated a deal to export a combined 200,000 tonnes per month of Iranian fuel oil from March through May.
"The big traders resumed moving gasoline to Iran shortly after sanctions were removed. Instead of a cash settlement, Iran pays back in fuel oil," a source described as a senior Iranian trading official was quoted as saying.
unnamed source described as a senior Iranian trading official
The big traders resumed moving gasoline to Iran shortly after sanctions were removed. Instead of a cash settlement, Iran pays back in fuel oil.
Barter deals are also said to be being cut with Russian companies, according to the reports, with the net result being "there is no extra fuel oil available in the short term, because they are all committed," according to the source.
A separate unnamed Iranian industry official was said to have commented that Iran usually exports 700,000-800,000 tonnes of fuel oil a month during the spring months.
While traders said it was most likely the cargoes would be fed into the Fujairah bunker market, or blended and redistributed to markets across Africa or Asia, Glencore was "heard" offering Iranian 280 cSt fuel oil to China for April arrivals, according to two unnamed Chinese sources.
Vitol and Glencore reportedly declined to comment on their operations or on any deals with the National Iranian Oil Company (NIOC).
NIOC officials were also said to have similarly declined to comment.
In February 2016 Ship & Bunker reported that crude futures surged when Iran suggested the country may support cuts to production.