Dubai’s government-owned refiner Emirates National Oil Co. imports about three condensate cargoes a month from Iran, or the equivalent of more than 100,000 barrels a day, according to Bloomberg tanker tracking.
One of the unknowns in Donald Trump’s decision to restore sanctions on Iran’s petroleum exports is whether the U.S. will also restrict the country’s substantial sales of condensate.
The lack of clarity compounds a dilemma for Iran’s neighbor Dubai, potentially cutting off the emirate’s main refinery from the Middle East’s biggest supplier of condensate, a light oil found with natural gas. Dubai’s government-owned refiner Emirates National Oil Co. imports about three condensate cargoes a month from Iran, or the equivalent of more than 100,000 barrels a day, according to Bloomberg tanker tracking.
If the U.S. tries to curb Iran’s condensate sales — the Trump administration hasn’t specified if it will — Dubai will have to find another supplier or risk financial penalties. And unlike the earlier U.S. energy sanctions in 2012-2015, this round coincides with a diplomatic dispute between Dubai and the region’s second-largest condensate exporter, Qatar.
The United Arab Emirates, where Dubai is located, is one of four Arab countries that imposed an economic embargo last year on Qatar, accusing the sheikhdom of supporting terrorism.
ENOC Chief Executive Officer Saif Al Falasi declined to comment last week about what he planned to do if the U.S. targeted Iranian condensate sales. Asked if ENOC had a plan for alternative supplies, he said, “not today.”
The last time it targeted Iran’s oil industry, the U.S. sought to restrict exports except those made to six, mainly Asian, buyers. Dubai reduced its condensate purchases from Iran, but some shipments kept flowing, and the emirate also bought from Qatar.
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