Foreign Banks Sever Ties with National Iranian Oil Company

The front of the National Iranian Oil Refining and Distribution Company building is seen in Tehran.REUTERS

Kayhan Life – All International banks have severed business ties with the National Iranian Oil Company (NIOC) on October 31, an informed source has told Kayhan Life.

In a letter dated October 29, the NIOC broke the news to the financial directors (FD) of some of its subsidiaries, asking them to demand payments on all of their foreign exchange accounts receivable.

The letter is written and signed by Seyyed Mohammad Aghamiri, the deputy director of the NIOC’s central accounting department and sent to the financial directors (FD) of:

  • National Iranian South Oil Company (NISOC)
  • Iranian Offshore Oil Company (IOOC)
  • Iranian Central Oil Fields Company (ICOFC)
  • Pars Oil and Gas Company (POGC)
  • Iranian Oil Terminals Company
  • National Iranian Drilling Company (NIDC)
  • Petroleum Engineering and Development Company (PEDEC)
  • The FCO in charge of International accounts
  • Khazar Oil Exploration and Production Company
  • Pars Special Economic Energy Zone Co.

The letter reads: “International banks have announced plans to end business ties with Iran, effective October 31. Please direct your accounting departments to request payment on all foreign exchange accounts in a timely fashion, and notify this office of your progress. Each company is responsible for resolving issues regarding its foreign exchange accounts.”

As a way of circumventing the U.S. economic sanctions, the NIOC plans to sell Iranian oil to the private sector. Iranian crude was traded on the stock market on October 29. According to Ali Hosseini, the managing director of the energy stock market, an anonymous entity bought 280,000 barrels of oil. However, Kayhan Life understands that the “Oil Industry Pension Funds Investment Company (OPIC)” is the purchaser. The OPIC provides financial resources and services for oil and gas development projects to entities linked to the government of Iran, including subsidiaries of the NIOC.

Meanwhile, the Minister of Petroleum Bijan Namdar Zanganeh has denied recent reports about Russia’s plan to sell Iranian oil on the international market.


Translated from Persian by Fardine Hamidi