Neighbors Azerbaijan and Iran have been strengthening ties since the removal of sanctions against Tehran in January, and on Tuesday, Iran's national oil company NIOC and Socar signed a memorandum of understanding as part of a visit by Azeri President Ilham Aliyev to the Islamic Republic.
'We have been actively trading with NIOC in the Caspian Sea region, until international sanctions forced us to discontinue such deliveries. There is a great potential to explore,' Arzu Azimov, the chief executive of Socar Trading, said.
Other possibilities include trading refined products with Iran in the Persian Gulf, where Socar has storage facilities in the United Arab Emirates port of Fujairah. One option was to supply Iran with gasoline and to buy naphtha and liquefied petroleum gas (LPG), Azimov said.
Geneva-based Socar Trading was set up in 2007 as the trading arm of Socar to market Azeri volumes. It expanded into crude processing and paper trading for hedging purposes before gradually trading third-party crude and products.
Azimov said Socar Trading, which currently employs less than 200 people globally, sees its role as somewhat different from the trading arms of many national oil companies.
'Where the market is oriented towards direct deals between producers and consumers, there is no space for trading houses. We need to be customer oriented. I see us as a services provider,' Azimov told Reuters.
He said about 90% of its profit was from outside trading of its parent company's oil or products and it was expanding in new markets beyond oil, such as LNG.
'We decided that buying and selling LNG wasn't terribly attractive. So we started looking at other options. We looked at Malta, an interesting case as it is not connected to an EU gas grid and has been burning fuel oil for heating needs,' he said.
Socar Trading won a tender with a consortium including Germany's Siemens to supply LNG and build a re-gasification facility for the Mediterranean island, with supplies due to begin next year.
Socar Trading plans to open an office in Houston to trade and arbitrage oil and products in and out of the US. It already has a business unit in Calgary, where it is actively exploring trading opportunities between the US and Canada.