Iran’s state-run oil company is in talks to salvage a $1 billion oil deal with Swiss trader Vitol Group as companies sever ties with the Islamic Republic ahead of U.S. sanctions.
The Islamic Republic is fighting to keep one of its most profitable oil deals, according to people familiar with the matter. The fuel trading arm of National Iranian Oil Co. held discussions to extend or renew a deal in which Vitol is pre-financing the equivalent of $1 billion in exchange for future oil deliveries. The deal between Iran and one of the world’s largest independent oil traders was struck in 2016 after a previous round of sanctions had ended.
French oil giant Total SA recently notified Iran that it had left its project in the South Pars natural-gas field. Iran now expects crude exports to drop as buyers cut purchases by a third ahead of a Nov. 4 deadline set by the Trump administration to bring back bans on Iran oil.
Iran’s agreement with Vitol has continued in recent weeks, with the company handling frequent deliveries to the United Arab Emirates, one of these people said.
But another person familiar with the company’s thinking said Vitol was likely to end the deal because Washington will prohibit business with NIOC and all Iran oil trades once U.S. sanctions begin.
“Vitol is fully compliant with all relevant international sanctions and regulations,” a Vitol spokeswoman said.
An official with NIOC’s fuel-trading arm declined to comment on the talks.
While Swiss and European Union officials have told companies in their countries to continue trading with Iran and oppose U.S. sanctions, Vitol’s chairman, Ian Taylor, said in May it is unlikely that most oil companies will be able to circumvent Washington’s restrictions.
