• 00:52
  • Tuesday ,11 September 2012

Iran in Talks to Sell Oil to Egypt

by The Wall Street Journal

Home News


Tuesday ,11 September 2012

Iran in Talks to Sell Oil to Egypt

Iran is in talks to sell oil to Egypt, officials on both sides say, part of a broader push to make up for lost European Union sales and a renewed engagement between the two countries.

Tehran has approached Cairo to sell 2 million barrels of oil—worth over $200 million—that are part of a stock of unsold Iranian crude stuck in the Egyptian port of Sidi Kerir because of international sanctions against Tehran, one person familiar with the approach said.

An Iranian oil official said the two sides have held talks on the matter.

"Between Iran and Egypt, there is some discussion. There is the idea they [will] import some oil from Iran," the official in Tehran said. He declined to be named because the talks are confidential and no deal has been completed.

Egyptian Oil Minister Osama Kamal told the state-run Al-Ahram newspaper last week that Cairo has "no objection" to importing and refining Iranian oil. He spoke after Egypt's president, Mohammed Morsi, attended a summit of the Nonaligned Movement of mainly developing countries in Tehran last month, the first visit by an Egyptian leader in decades.

Tehran cut ties with Cairo after its Islamic revolution in 1979 because of Egypt's peace accord with Israel. Iran hasn't delivered any oil to Egypt in the 33 years since.

Iranian leaders supported the 2011 uprising that brought Mr. Morsi, an Islamist, to power.

Iran badly needs new oil buyers after a EU oil embargo and U.S. pressure on its Asian clients more than halved its crude exports to 900,000 barrels a day.

The West has stepped up sanctions against Iran, alleging new evidence that Tehran is developing nuclear weapons. Iran says its nuclear program is for peaceful purposes.

Egypt consumes just 709,000 barrels of oil a day, according to BP BP.LN +0.78%PLC's authoritative statistical report, so alone it won't be able to make up Tehran's lost oil sales.

It remains to be seen if it could ever agree to make a move as sensitive as buying Iranian oil. "It's very preliminary. It has not been completed," the Iranian oil official said.

Such a move would surely anger Washington, possibly imperiling Egypt's ties with the U.S. Cairo is in talks to get $1 billion in debt relief from the U.S., which has spearheaded a global push to isolate Iran because of the nuclear dispute.

Iran and Egypt are also at odds over Syria, after Mr. Morsi recently described Tehran's ally as an oppressive and illegitimate regime.