Iran Nuclear NewsPetronas halts fuel sales to Iran as sanctions loom

Petronas halts fuel sales to Iran as sanctions loom


ImageReuters: Malaysia's Petronas has stopped supplying gasoline to Iran, a company spokesman said on Thursday, as the threat of U.S. sanctions on oil firms with supply ties to the Islamic Republic looms large. By Niluksi Koswanage and Luke Pachymuthu

ImageKUALA LUMPUR/DUBAI (Reuters) – Malaysia's Petronas has stopped supplying gasoline to Iran, a company spokesman said on Thursday, as the threat of U.S. sanctions on oil firms with supply ties to the Islamic Republic looms large.

Iran is the world's fifth biggest crude oil exporter but U.S. sanctions mean it has suffered from lack of investment in refineries, forcing the OPEC member to import some 40 percent of its gasoline needs.

Malaysia's state oil firm has stopped supplying gasoline to Iran since the middle of March, the Petronas spokesman told Reuters.

Petronas gave no reason for the pullout but an industry source in Dubai said the company wanted to safeguard its business exposure in the United States.

On Monday, Malaysian Prime Minister Najib and U.S. President Barack Obama agreed on the importance of Iran strictly abiding by its obligation under international nuclear non-proliferation pacts.

"The threat of sanctions has sent a clear message to the energy sector. The United States is serious about passing and enforcing comprehensive energy sanctions against the Iranian regime," said Mark Dubowitz, executive director of a Washington-based think-tank.

"The focus of the sanctions debate soon will shift to sanctions enforcement and a game of "whack-a-mole" between US authorities and Iran's energy partners."

Several of the world's top oil companies and trading houses have already curbed sales to preempt potential penalization of their U.S. operations.

LUKOIL, Russia's No. 2 oil company, this month joined a growing list of international oil and trading firms that has stopped gasoline sales to Iran.

In March, Royal Dutch Shell announced that it had stopped gasoline supplies to the Islamic republic, joining two of the world's largest independent trading companies, Glencore and Vitol, who had taken similar decisions.

Iran bought around 128,000 barrels per day (bpd) of gasoline in March, steady with imports the previous month, traders said.

Petronas last shipped a gasoline cargo into the Iranian port of Bandar Abbas between March 4 and 5, industry sources said.

The 255,000-barrel cargo was loaded from the United Arab Emirates port of Jebel Ali, a key transshipment and oil storage hub for fuel supply in the region.

Petronas has been shipping about 16,000 barrels per day (bpd) of the motor fuel to OPEC members since the fourth quarter of 2009, traders said.

It has been supporting sales to Iran via its fuel storage tanks at the port of Fujairah in the UAE.


Petronas' pullout may pave the way for Chinese oil firms to gain a stronger foothold in Iran as state run Chinaoil this week sold two cargoes of gasoline to Tehran, underscoring Beijing's desire to maintain economic ties.

"Someone has to fill the void. It's a high possibility that Chinese companies will benefit from this, especially since China has a glut of gasoline supplies," said Victor Shum, an analyst at energy consultancy Purvin & Gertz.

Another Chinese company, Sinopec, is also poised to sell gasoline to Iran for the first time in six years, trade sources said on Wednesday.

China's imports of Iranian crude shrank by nearly 40 percent in the first two months of 2010 from a year ago, Chinese customs data showed, despite the Asian economy's growing hunger for foreign oil.

(Editing by Clarence Fernandez)

Latest news

Iran’s New Generation Seeks Nothing but Regime Change

In a silly and desperate statement, the Iranian regime’s foreign minister Hossein Amir-Abdollahian claimed that nothing special is going...

Iran’s Youths Broke the Spell of Fear

One of the main characteristics of the recent protests in Iran is the courage and fearlessness of the people,...

Iran Is on the Brink of a Revolution

The wall of fear has been broken. In many cities across Iran, women are taking to the streets, leading...

Iran’s Regime Claims To Fill Global Energy Gap Despite Crippled Petroleum Sector

In recent weeks, the Iranian regime’s officials have been constantly exaggerating their huge capacity in oil and gas reserves...

What Is Happening in Iran?

Following the brutal killing of Masha Amini, the Iranian people have once again united to fight and defeat the...

Iran Regime’s Ministry of Culture’s Decision To Eliminate Children’s Intellectual Centers

With the so-called ‘Cultural Revolution’ which took place between 1980 and 1983, the Iranian regime tried to purge the...

Must read

Iran makes arrest over Putin assassination rumour: report

AFP: Iran has arrested a man for starting a...

Iraqi Study Group report

Iran Focus: London, Dec. 08 – The following is...

You might also likeRELATED
Recommended to you