Reuters wrote on Tuesday that new Iranian President Hassam Rouhani's "charm offensive" at the United Nations last month, coupled with a historic phone call with US President Barak Obama, revived market hopes that Iranian barrels could return if the diplomatic mood music translates into a breakthrough in the stand-off over Tehran's nuclear program.
"The Iranians are calling around already saying let's talk ... You have to be careful, of course, but there is no law against talking," said a high-level oil trader, whose company is among many that stopped buying Iran's oil because of sanctions.
The West's energy watchdog, the International Energy Agency (IEA), said this month that despite the first high‐level talks between Iran and the United States since the 1979 Iranian Revolution, few expected sanctions to be eased soon.
"Rather, most expect that turning the clock back on sanctions will be a drawn-out process based on tangible diplomatic progress with regard to the issues at hand, which many still view as a remote prospect," the IEA said.
However, last week Iran issued its first tender in two years to import fertilizers, in what traders said could be a test ball for the easing of sanctions on funding import-export operations with the country.
It is also sending strong signals to oil markets about its pricing policies should it make headway in the nuclear talks with the West. The next round of talks with the UN nuclear agency is planned for next week.
"Given the new circumstances, a large number of traditional buyers of Iranian oil are making the preparations and providing the facilities for raising their oil purchase from Iran," news agency Shana quoted National Iranian Oil Co's head of trading Mohsen Ghamsari as saying.
"If I'm allowed to buy again, I will jump on it straight away," said a European refiner, who asked not to be named. "Europe is terribly short of sour, heavy crude; the only one available is Russia's Urals, and it has become very expensive."
Olivier Jakob at consultancy Petromatrix agrees that Europe's struggling refiners will not hesitate long before buying Iranian crude oil.
The West thought the sanctions could halt Iran’s nuclear program, but it has continued the program without any interruption and insisted on the peaceful nature of the nuclear activities.
NTJ/BA