Iran’s U.S. Oil Sales Top $3.5 Billion

After shunning Iranian oil for years because of political sensitivities, major U.S. oil companies recently have become some of Iran’s biggest customers and are now buying Iranian crude at an annual rate of more than $3.5 billion, according to oil traders, industry officials and analysts.

The U.S. purchases amount to about one-fourth of Iran’s total oil exports and mark a major shift in the international trading practices of some large U.S. oil companies.

The new contracts, among other things, are aiding Iran’s drive to plow increased oil revenues into large-scale economic and military reconstruction and reassert its claim to be a force to be reckoned with in the Persian Gulf and beyond.

For the first time since the 1979 Iranian Revolution, U.S. oil firms are now taking on crude directly from Iran’s export terminal at Kharg Island, oil traders and other industry officials said. And taken together, the U.S. companies have replaced Japan as Iran’s biggest oil customer, according to London oil traders and statistics compiled by the Middle East Economic Survey, a Cyprus-based journal.

The contracts between U.S. oil firms and Tehran--most of which have been signed in 1992--are permissible under U.S. law, according to oil industry and U.S. government officials, because the oil is not imported directly into the United States.

Some large U.S. oil firms recently reconsidered their policy toward Iranian contracts because of changes in the oil markets, the loss of Iraq as an oil exporter and Iran’s efforts to rehabilitate its image, traders and analysts said.

Iran remains on the State Department’s list of countries deemed to be supporting international terrorism. U.S. officials have expressed concerns about Iran’s reported efforts to acquire conventional and nuclear arms.

But other developments such as Iran’s role in the release of Western hostages held in Lebanon and its neutrality during the Persian Gulf War have helped to shape a rapid change of perception by some U.S. oil companies, analysts said.