TEHRAN, Nov 14 (AFP) - A hike in light crude prices has hit an oil swap deal between Iran and three Caspian states, with the countries preferring to sell their oil directly to more profitable markets, the student news agency ISNA reported Sunday.
"Because of the higher price of light crude compared to heavy crude, the Caspian coastal states have exported their light crude to Mediterranean and northwest European markets directly," said the head of the state-owned National Iranian Oil Company's international affairs department, Hojjatollah Ghanimifard, quoted by ISNA.
He said normally the countries mixed light crude with heavy crude to make it ready for treatment in Iranian refineries in Tehran and Tabriz.
"Currently the light crude price has fallen down a little in the northwest of Europe, but it is still high in the Mediterranean markets," the official said, adding however that the future of the deal was not in doubt.
Based on a three-phase project, called CROS, 120,000 barrels per day (bpd) of crude is being received by Tehran and Tabriz refineries from Russia, Kazakhstan and Turkmenistan.
In return for receiving the oil, Iran exports the same amount to the three countries' customers via the Gulf, earning between 1.5 to two dollars per barrel for the arrangement and up to 90 million dollars a year.
As a shorter and less costly route, Iran is hoping the deal will be a rival for the US-backed Baku-Ceyhan pipeline to the Mediterranean -- scheduled to be operational in 2005.
11/14/2004 18:18 GMT - AFP