ROYAL Dutch Shell is struggling to pay off $1bn (£630m) that it owes Iran for crude oil because European Union and US financial sanctions now make it almost impossible to process payments.
The oil major owes a large sum to the National Iranian Oil Company for deliveries of crude, with one putting the figure at close to $1bn, according to industry sources. A debt of that size would equate to about 8m barrels.
Shell declined to comment.
The European Union toughened financial sanctions and placed a ban on Iranian oil imports in January but gave companies until July to wind down their existing business.
With daily contract volumes of 100,000 barrels, Shell ranked as Iran’s second biggest corporate client – along with France’s Total – behind Turkey’s Tupras.
Shell’s chief executive Peter Voser said last month the company would take its final deliveries of Iranian crude “within a matter of weeks”.
Rigorous US and European financial measures aimed at punishing Iran for its nuclear programme have already come into force, making it increasingly difficult to pay for and ship crude from Iran.
Given the outstanding amount owed in the face of sanctions, senior oil executives say the only way forward is for Shell to ask the British government to help settle the account with Iran.
City A.M. Reporter