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damaging others,” he reportedly said.
“The amount of oil going through the Strait of Hormuz is so large. There’s more than 18 million barrels a day, about two-thirds of world maritime oil trade. Meaning, cutting oil from there will lead to an acute oil shortage and prices will skyrocket,” Muhanna was also cited as saying, adding: “Is Iran able or willing to close completely, or even partially, the Strait of Hormuz or Bab Al-Mandab, or both? The answer is no, and a really big no.”
The longrunning dispute between Turkmenistan and Iran over historical gas supply debts has arrived at the International Court of Arbitration (ICA) and a verdict in the case is expected to be given in around two years, Mehr News Agency reported on August 15.
Turkmenistan and Iran both agreed to go to an international tribunal over the gas row in which Ashgabat says Tehran owes Turkmenistan some $1.8bn of historical gas dues that built up over several years . Iran disputed the claim, saying that Turkmenistan had changed its prices retrospectively. Turkmengaz officials filed the lawsuit against Iran at the ICA.
The Turkmen foreign ministry has said that Iran's debts stem from the National Iranian Gas Company's (NIGC's) failure to abide by a "take or pay" provision of the gas supply contract. Before the development of the row, Turkmenistan demanded a ninefold gas price hike, raising the prices of its gas exports to $360 from $40 per 1,000 cubic metres.
NIGC previously noted that “Turkmengaz has committed numerous violations of the terms of the contract, including in the quality and quantity of deliveries, which are subject to penalties provided in the contract”.
Though Iran is gas-rich, a lack of gas distribution infrastructure persuaded NIGC to rely on a gas swap deal with Turkmenistan to supply gas to northern Iranian provinces during the cold winter months.
Petrol output in Iran has risen 50% y/y since the beginning of the current Persian calendar year (started March 21), NIPNA on August 7 reported National Iranian Oil Products Distribution Company (NIOPDC) as saying. Iran has invested tens of millions of euros in the development of its petroleum industries in recent years. The revamped Persian Gulf Star refinery in the south of the country only recently went into operation. It produces Euro-4 and Euro-5 quality gasoline for domestic consumption and regional export. NIOPDC said average daily petroleum output stood at more than 93mn litres during the four-month period. Iran’s daily petroleum production will hit a record of 95.5mn litres in coming days, thanks in part to Persian Gulf Star refinery increasing its overall output, it added. Figures from the facility suggest its daily petroleum production has lately risen by 2mn litres to stand at 26mn litres on a monthly average.
9.1.2 Automotive sector news
Iran’s automotive assemblers saw output fall in the third Iranian month of Khordad (ended June 21) to 108,334 units, a decline of 19.6% y/y.
The decrease can be attributed to the collapse of the Iranian rial (IRR) and the consequent difficulties producers and assemblers have had in sourcing metal and imported auto parts. The year-on-year fall is the first such decline suffered by Iran’s car assemblers in recent years and also indicates that the government and importers did not get a handle on the changing economic landscape driven by Washington’s squeezing of Iran’s economy.
Raw material costs, including those of stainless steel and aluminium used in
37 IRAN Country Report September 2018 www.intellinews.com