European refiners ready to welcome return of Iranian crude

* European refineries halted Iranian crude buying in 2012

* Iran wants to retrieve market share after sanctions

By Ron Bousso

LONDON, July 14 (Reuters) - Mediterranean refiners are

gearing up to welcome the return of Iranian crude oil to the

market which could push prices lower and boost profits following

the easing of Western sanctions under a landmark nuclear deal.

Iran's crude exports were a regular fixture for European

refineries before Western sanctions were imposed on the key OPEC

producer in 2012 over its nuclear programme, halving its exports

to just over 1 million barrels per day.

"Iran has been a long standing valued partner ... We are

looking forward to Iran coming back to the market," said a

spokesman for Greece's biggest refiner Hellenic Petroleum (Athens: ELPE.AT - news)

, stressing that they will not buy any crude before

sanctions are officially lifted.

"The volumes of crude oil that will re-enter the

Mediterranean market will ease prices and give more options for

refiners in the region," he added.

Though there were no details on how sanctions on oil will be

eased, Iranian officials indicated they would try to maximise

crude exports to Europe and restore a market share of over 40

percent there.

Analysts expect the deal could see Iran increase its oil

exports by up to 60 percent within a year.

Additional volumes of crude would only pile pressure on a

market already facing a large oversupply. For refiners, however,

cheaper feedstock means higher profit.

Iranian crude accounted for around one quarter of Hellenic's

crude oil intake before 2012, and just like many Mediterranean

refiners, it is geared up for Iranian crude.

European oil buyers, including Italy's Eni (NYSE: E - news) and

Saras have held talks with National Iranian Oil Company

(NIOC) officials in Europe and Tehran over the past year in

anticipation of sanctions being eased.

A spokeswoman for Spain's Compania Espanola de Petroleos

(CEPSA) said "Iranian crude has largely been part of our supply

and we maintained a long commercial relationship with them."

"If sanctions are lifted, as it seems, Iranian crudes will

definitively be again another alternative to consider," CEPSA

told Reuters in a statement.

Asian buyers, notably China, India and Japan, have continued

to buy limited volumes of Iranian crude in recent years.

"Two to three months from now, you will probably see some

Iranian crude coming to Europe and Asia," said Eshan Ul-Haq,

senior market consultant with KBC, which expects Iran's export

to rise over that period by 300-400,000 bpd, of which 150,000

bpd is expected to reach Europe.

"It would mean cheaper crude for Mediterranean refineries,

especially smaller countries that have been impacted by economic

problems - like Greece," Ul-Haq said.

Royal Dutch Shell, whose officials recently held

talks in Tehran on future cooperation and the repayment of the

Anglo-Dutch company's $2 billion debt said on Tuesday it was

interested in doing business in Iran.

"Strictly within the boundaries of the law, we are

interested in exploring the role Shell (LSE: RDSB.L - news) can play in developing

Iran's energy potential," a spokeswoman said.

The table below shows the Iranian crude oil imported by

companies in Europe, including Turkey, prior to the 2012

European oil embargo.

Figures in '000s of bpd are based on industry and Reuters

estimates.

Customer Country Volume '11

Tupras Turkey 200

Total France 100

Shell UK/NL 100

Hellenic Greece 80

Cepsa Spain 70

Motor Oil Greece 60

Repsol Spain 30

ERG Italy 30

Iplom Italy 30

ENI Italy 20

Saras Italy 20

Total (Other OTC: TTFNF - news) 740

(Additional reporting by Libby George, editing by David Evans)