Iran started swapping oil with Iraq's Kirkuk on Sunday, after the two neighbours sorted out the logistic issues that were preventing the swap's startup.
According to the CIF-based swap deal, Iran receives 30,000 to 60,000 bpd of oil from the Kirkuk oil fields in northern Iraq to an Iranian refinery across the border via tanker trucks, in exchange for oil for southern Iraq.
On Sunday, the tankers offloaded their cargoes at storage tanks in Iran's Darreh Shahr, the western province of Ilam, which were installed in the city by the National Iranian Oil Products Distribution Company (NIOPDC) for the purposes of the swap operation.
The oil is to be fed to Iranian refineries. The swap agreement is subject to renegotiation.
Based on cost, insurance and freight (CIF) sale terms, seller must pay the costs and freight includes insurance to bring the goods to the port of destination.