NIOC Halts Selling Liquefied Fuel on IRENEX

EghtesadOnline: Due to the big increase in liquefied fuel consumption over the last few weeks, the National Iranian Oil Company has stopped selling diesel and mazut on the Iran Energy Exchange, the company’s representative in charge of offering petroleum products in IRENEX said.

News ID: ۷۴۹۷۱۵

17 February 2020

“The temporary suspension has nothing to do with the International Maritime Organization’s new regulations for 0.5% global sulphur cap for marine fuels,” Amirhossein Tebyanian was quoted as saying by ILNA.

When consumption (mostly in power plants) declines, selling mazut and diesel will resume in the energy bourse, Financial Tribune quoted him as saying.

Between December 2019 and February 2020, diesel and mazut consumption in thermal plants jumped to 40 million liter per day -- up 300% compared to March-December (2019) when the figure barely stood at 10 ml/d.

Because of the pattern of rising household gas consumption, hovering around 600 million cubic meters per day over the last 30 days, power plants have not received enough gas as feedstock and had to use environmentally-unfriendly fuels.

According to the official, between December 2019 and January 2020, two cargos of diesel were offered via the energy bourse and NIOC sold 533,000 barrels.

In the first offer on Dec. 25, NIOC sold 250,000 barrels and 333,000 barrels was delivered to buyers on Jan. 1.

The official did not disclose the value of the two shipments, but said the low sulfur diesel was sold at $8.7 less than Persian Gulf quotation for 500 PPM sulfur diesel.

According to the official, the National Iranian Oil Refining and Distribution Company is in charge of land delivery of petroleum products.

The Oil Ministry in mid-summer started offering oil products, namely gasoline and diesel, on IRENEX after the initiative to sell crude oil on the bourse flopped.

With dwindling oil export revenues due to the new US economic sanctions, selling oil byproducts via IRENEX has helped the government to some extent.

Liquid fuels are mainly derived from fossil fuels and many have a primary role in the transportation sector and the economy. The fuels include gasoline, diesel, kerosene, LPG, propane, butane, jet fuel, methanol, ethanol and butanol.

While US sanctions on the key oil industry have hurt crude oil exports to a great extent, oil product sales remain strong generating between $300-$500 million a month, shipping data and Reuters calculations show.

Sanctions so far have not severely affected exports of oil products, primarily fuel oil for power generation and shipping as well as LPG used as cooking gas and petrochemical feed.