A top Iranian oil industry official says the National Iranian Oil Company (NIOC) is building a new crude oil storage facility in the Persian Gulf.

Managing director of Iranian Oil Terminals Company (IOTC) Seyyed Pirouz Mousavi said on Monday that in order to reduce the impact of the European Union sanctions on Iran’s oil sector, the country has re-commissioned a new storage facility at the Kharg Island oil terminal which can hold as much as one million barrels of crude.

The official added that increasing oil storage capacity will improve oil production and export conditions.

He stated that overhauling the facility has been carried out by domestic contractors and manufacturers, adding that Iran owes 70 percent of the increase in its oil storage capacity during the current Iranian calendar year (ending March 20) to domestic manufacturers.

Mousavi had announced earlier that Iran is capable of storing crude oil in the Persian Gulf for a period of 10-12 days, adding that the figure should hit 30-40 days by building the new storage facilities.

International experts believe that increasing oil storage capacity will improve Iran's position in marketing and selling crude oil.

The country started building its first private oil terminal capable of holding 8 million barrels of oil in the Genaveh port city in January.

The Kharg oil terminal is currently handling about 98 percent of Iran's crude exports and the island has more than 40 storage facilities capable of holding a total amount of 22 million barrels of crude oil.

Iran has also started building four new storage facilities on Kharg Island with the overall capacity of 4 million barrels of crude oil.

The country holds the world's third-largest proven oil reserves and the second-largest natural gas reserves.

The US and EU have imposed international and unilateral sanctions on Iran and its oil and financial sectors to prevent other countries from buying crude oil from Tehran or doing business with its banks.

They claim that the Iranian nuclear energy program includes a military component despite the fact that International Atomic Energy Agency has never been able to prove, in its strict inspections, that there is deviation toward military purposes in Iran's nuclear energy work.

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News ID 181614