Emirates National Oil Co (ENOC) has started importing condensate from Qatar to replace sanctioned Iranian oil and is close to finalizing deals with other producers, the Dubai government-owned company said on Sunday.
ENOC was the biggest buyer of Iranian condensate in 2012 when its imports rose to an average of 127,000 bpd, up from 106,000 bpd in 2011, despite U.S. pressure to stop the trade.
U.S. officials have for months been leaning on ENOC to find alternative sources for a refinery which provides the city’s 2 million mainly expatriate residents with cheap fuel.
ENOC, which needs to import oil because Dubai’s crude production is too meagre to satisfy thousands of gas-guzzling vehicles’ fuel thirst, has now begun importing the light oil from nearby U.S. ally Qatar and is scouring the globe for more.
« ENOC has already started importing condensates from Qatar to meet the current local market demand, » ENOC said in a statement.
« With oil price volatility continuing to have a bearing on financial bottom lines, along with increased demand for petroleum products and the shortage of imported condensates from Iran because of the applied economic sanctions, we are evaluating various sources for condensate for our refinery. »
ENOC said it was currently finalising contracts with other leading condensate producers in the region to meet its fuel needs over the next few years.
U.S. ally Saudi Arabia, a significant condensate seller, has complained that ENOC’s trade undermines sanctions against its OPEC rival Iran.
U.S. and European sanctions have slashed Iran’s crude export revenues in a bid to force Tehran to drop a nuclear programme that Washington and Brussels fear is designed to develop weapons, charges Iran denies.
Last summer, Washington tightened controls on financial transactions for importing Iranian condensate, a light oil.
But ENOC, which loses millions of dollars a year selling subsidised fuel at 1.72 dirhams ($0.47) a litre, increased its Iranian oil imports last year because cheaper Iranian supplies helped lessen the burden of selling gasoline at below cost.
ENOC did not give any details of the price it has agreed to pay Qatar, one of the world’s largest condensate producers, or identify other producers it is in talks with.
($1 = 3.6730 UAE dirhams)