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WASHINGTON, D.C. â€“ U.S. Sen. Lisa Murkowski, R-Alaska, today made the following comment on media reports that Vitol, a Dutch-Swiss energy trading company and the second largest purchaser of oil in the Strategic Petroleum Reserve (SPR) sale last month, has signed an agreement to resume trading with Iran:
“Vitol’s involvement in the SPR sale raises two serious questions. The first is whether this administration violated its own sanctions against doing business with companies involved with Iran. The second, is why the administration is selling SPR oil – at a discount – to speculators at all,” Murkowski said. “From the beginning, the administration’s decision to sell 30 million barrels of oil from our emergency stockpile appeared to be motivated by more politics than policy – now it appears there may be legal questions related to the sale as well.”
Argus reported Friday that Vitol, which won 4 million barrels of oil in last month’s SPR sale, recently signed a confidentiality agreement with the Iranian government. The trade publication IHS Global Insight on June 24 reported that Vitol had struck an agreement to resume supplying northern Iran with crude from Turkmenistan in exchange for crude from an Iranian port in the Persian Gulf.
Until mid-2010, Vitol was Iran’s key petroleum fuel supplier, and it’s widely believed that this new agreement signals a resumption of trading activities between Vitol and Iran before the end of the year.
Murkowski is sending a letter to President Obama asking for a detailed explanation on how the sale did not violate the Iran Sanctions Act.
“The administration needs to clear up lingering questions about whether Vitol was an eligible bidder despite the company’s well-known ties to a country that has repeatedly called for the destruction of the United States and its allies,” Murkowski said. “Vitol insists that it’s no longer doing business with Iran, yet media reports suggest otherwise. If Vitol is doing business with Iran, directly or indirectly, the administration needs to revisit whether Vitol was an appropriate and lawful purchaser of SPR oil.”
Almost half of the winning bids in last month’s SPR sale were awarded to companies primarily engaged in speculative trading activities, and their bids on average, were well below market prices. Oil is now almost $7 higher than the day of the sale announcement.
“If the purpose of this release was to provide much needed relief to American drivers, then clearly the administration has done more harm than good. The only real winners in this sale were the traders, who will sell the oil back to American refiners at a profit.”
Since the June sale announcement, administration officials have signaled that they are considering additional SPR releases.
“Instead of continuing to sell our emergency oil supplies to the highest bidder, regardless of who they are or what they intend to do with the oil, the administration should work with Congress to develop our national resources. This would result in a real, long-term solution to our country’s critical economic and energy needs,” Murkowski said.