Turkey to Ship Gasoline to Iran

• Text size
•  
•  

Iran is expected to receive its first shipment of gasoline from Turkey in at least 18 months in June, industry sources said on Tuesday.

The deal followed an agreement concluded last week between Turkey and Brazil with Tehran over a nuclear fuel swap designed to quell international fears over the Islamic Republic's nuclear program.

The gasoline shipment arriving from Turkey is set to discharge in Iran by mid-June, two industry sources said.

"So far we have not seen gasoline arriving from Turkey, but this is probably a new alternative source because of the problems with sanctions," an industry source familiar with Iranian fuel shipments told Reuters.

The cargo was likely being shipped into Iran via a third-party trader, a second source said.

The threat of US sanctions on fuel suppliers to Iran has reduced the pool of firms prepared to sell gasoline to the OPEC member.

"Turkey's decision to ship gasoline to Iran at the same time that many of America's allies are ending this trade could put Ankara in the cross-hairs of a Congress determined to enforce energy sanctions against Iran," said Mark Dubowitz executive director of a Washington-based think-tank.

But despite international oil companies ceasing new business with Iran, it continues to find new supply sources to meet its demand for the motor fuel.

"The harder you squeeze them the more resourceful they will become. Today it is Turkey -- who knows where we will see gasoline from next?" a trader said.

Tupras, Turkey's only oil refiner, would not confirm whether it was shipping the gasoline cargo to Iran. Asked whether such a shipment was underway, a spokesman said: "Work on this continues." Turkey last year exported 1.63 million tons of gasoline.

China Resumes Shipment
China Petroleum & Chemical Corporation better known as Sinopec Corp. is to ship well over a half million barrels of gasoline to Iran.

Sinopec Corp's trading arm Unipec is shipping around 600,000 barrels of June arrival gasoline from Singapore to Iran.

The Chinese company last made a direct shipment to Iran in April, sources said.

Iran, which is the second-largest OPEC producer, relies on the international market to secure 40 percent of its domestic gasoline requirements because it lacks the refining capacity to produce its own.

The possibility of imposing penalties on fuel suppliers to Iran has slashed the number of companies which sell gasoline to the country.

US Bill
A US House committee has proposed barring the Pentagon from buying fuel from companies that do business with Iran's energy industry--a stance that is a long shot for becoming law but that underscores US lawmakers' continuing dissatisfaction with international efforts to slap tough sanctions on Tehran.

An amendment to a defense-spending bill will cost some European oil firms billions of dollars in Pentagon contracts if they buy Iranian oil.

"The Secretary of Defense may not enter into any contract with an entity that engages in commercial activity in the energy sector of Iran," the amendment says, according to a copy reviewed by The Wall Street Journal.

The Pentagon is the world's single-largest oil consumer, burning around 400,000 barrels a day for its sprawling fleet of aircraft and vehicles, according to Congressional estimates.

European energy companies Royal Dutch Shell PLC and BP PLC have been the Pentagon's top fuel-supply contractors in recent years, according to data from USAspending.gov, an Office of Management and Budget website that tracks federal contracts.

It estimates that since 2000, Anglo-Dutch Shell has signed deals with the Pentagon worth about $8.8 billion. BP PLC has signed contracts worth a total of about $7.2 billion in the 2000-2009 period and has an estimated $838 million worth of contracts expected this year with the Pentagon.

The two oil companies also buy crude oil from Iran. Last week, The Wall Street Journal reported that some companies, including Shell, have been disguising some of those Iranian purchases, according to shipping records, even though they remain perfectly legal.

© Iran Daily 2010