Iran Economy NewsIran fuel imports dive in Sept on sanctions-trade

Iran fuel imports dive in Sept on sanctions-trade


Reuters: Iran has so far imported less than one gasoline cargo for September, taking shipments to some 80 percent less than in August when they had already nosedived from a year ago, according to Reuters calculations based on trade sources.

By Reem Shamseddine and Luke Pachymuthu

KHOBAR, Saudi Arabia/SINGAPORE, Sept 24 (Reuters) – Iran has so far imported less than one gasoline cargo for September, taking shipments to some 80 percent less than in August when they had already nosedived from a year ago, according to Reuters calculations based on trade sources.

Tighter U.S.-led sanctions took effect in July, prompting many international trading firms to halt business with Iran.

Although the world’s fifth-largest crude exporter, lack of refining capacity means the Islamic Republic still depends on imports for up to 40 percent of its gasoline needs. Figures so far showed Iran would be importing only 12,000 tonnes of gasoline in September, not even as much as one standard cargo of 33,000 tonnes (280,000 barrels).

This is around 80 percent less than the two cargoes or around 18,000 barrels per day imported in August and marks a massive drop from Iran’s monthly purchases of 10-12 cargoes before the sanctions.

“The whole thing is exceptionally political therefore economics doesn’t play a part,” an industry source said. “They might be paying for half a cargo, but that doesn’t necessarily make it wrong.”

Many potential suppliers have stepped away, although analysts say Russia and China have reasons for seeking to maintain a relationship with Iran that faces punitive Western measures over its nuclear programme.

A major supplier in June, neighbouring Turkey ceased to export gasoline to Iran in August, figures from the exporters body showed in early September.

“It’s almost not worth it,” the industry source said. “You have to get really clever. You have to be selling it to somebody who is supposedly taking the cargo to somewhere and it doesn’t go to that somewhere but ends up going to Iran.”


Analysts say both Iran and potential trading partners still willing to do business with it might wait for a while to see the world’s focus shift from this issue.

“At the moment, both the U.S. government and several others are watching very closely to find an example (of what would happen if a company would violate sanctions),” said Samuel Ciszuk, senior energy analyst at IHS consultancy.

“Hoping that people will lose interest, they (Iran) might try to lie low for a while and perhaps return to the market earlier next year.”

The Islamic Republic has also said it has achieved self-sufficiency in gasoline — a statement that has so far failed to convince traders and analysts.

Although Iran could have raised its domestic production by using its petrochemical units to produce fuel, it would still require at least 4-5 cargoes every month, traders say.

“In the earlier part of the year, Iran has stockpiled gasoline, they might be running those stocks down,” Ciszuk said.

Iran has said its nuclear plans are solely aimed at producing energy and not at developing a nuclear bomb. (Additional reporting by Humeyra Pamuk in London, Editing by Barbara Lewis and Sue Thomas)

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