. Last Updated: 07/27/2016

Kazakhs To Swap Crude Oil With Iran

TEHRAN -- Kazakhstan signed a deal in Tehran to export crude oil to Iran on an exchange basis, Tehran radio said.

"Kazakhstan's oil will be transferred to Iran on the Caspian Sea coast and Iran will produce its equivalent crude in the Gulf for export to international markets," the radio said Saturday.

It said Iranian President Akbar Hashemi Rafsanjani and Kazakhstan President Nursultan Nazarbayev signed an agreement on "laying the pipeline to carry Kazakhstan's crude through Iranian territory."

"Kazakhstan's president considered Iran the most suitable route for export of its oil," it added.

Iranian Oil Minister Gholamreza Aghazadeh had said the best solution for northern neighbors Kazakhstan and Azerbaijan, which have no easy access to world markets, was for them to swap their crude for Iran's.

The swaps envisage their selling Iranian oil -- which has easy coastal access -- while Iran consumes their crude, presumably at a discount rate to make it worth Tehran's while.

It could save their each building expensive pipelines to the coast.

The radio did not mention a price tag for the deal or the amount of crude that would be exported but earlier estimates put the volume at between 2 million and 5 million tons of crude oil per year.

Rafsanjani said "Iran would refine the Kazakh oil received at the Caspian Sea at Tehran's refinery and will deliver it at the Gulf," adding that "Iran would gain from its added value."

The pact will give the land-locked Central Asian republic some badly needed export capacity.

"Kazakhstan is ready to cooperate trilaterally with Iran and the Turkmenistan Republic on building an oil pipeline in Iran," state-run television quoted Nazarbayev as saying.

Tehran, resisting a campaign by Washington to isolate it politically and economically, has sought to boost its ties with its Central Asian neighbors and other countries.

Iran, regarded by the United States as an outlaw state, is not seen as a viable candidate for a pipeline route for Central Asian exports.

But Kazakhstan views Iran as an outlet for so-called "early oil" until other routes are opened.

Kazakhstan's Deputy Foreign Minister Vyacheslav Gizatov said in April that the deal had been reached and the only outstanding issue concerned transit tariffs.