Page 5 - DMEA Week 38

DMEA COMMENTARY DMEA

Consolidation the government running up an $18bn debt to
It will concern observers to note that 10 of Prime IOCs. In addition, the endemic corruption has
Minister Mustafa al-Kadhimi’s closest allies and led to many international companies refusing to
advisors have been appointed to run banking expand operations in the country so as not to fall
and national security firms. This includes the foul of the law, with ever more scrutiny on pay-
Trade Bank of Iraq, the Central Bank of Iraq and ments, with Iraq firmly in the crosshairs.
various executive branches as well as Ismaael at MEOG’s original investigation estimated that
the INOC. around $4bn per year had been appropriated by
As al-Kadhimi consolidates power, he and his regional and federal officials, with the invasion
supporters will effectively be in full control of the by Daesh only serving to add greater opacity to
Iraqi economy. This is not entirely unusual for the financial dealings.
an incumbent government, but the deep-rooted Amid discussions with various US firms as
corruption in the country gives rise to great con- well as Saudi Aramco ongoing regarding the
cerns about this concentration of ownership. development of Iraq’s energy sector, there will
Previous investigations by Middle East Oil be no shortage of interest in whether or not the
& Gas (MEOG) have found that ‘miscellaneous’ concerns raised by the original 2018 INOC law
payments in previous accounting periods led to can be resolved by the latest iteration. ™

Venezuela and Iran take

the next step

The latest tankers to bring Iranian fuel to Venezuela are also
handling the latter country’s crude exports

IRAN VENEZUELA’S oil industry has deteriorated Venezuelan port in late May and early June and
significantly since January 2019, when the US succeeded in discharging their cargo. They then
WHAT: government imposed sanctions on PdVSA, departed the South American country and went
An Iranian tanker has the national oil company (NOC). The signs of on to their next assignment.
loaded up with Merey-16 decline have been obvious – falling production The second fleet consisted of four ships.
crude for export. levels, reduced refinery throughput and wide- Again, all were loaded with Iranian gasoline.
spread fuel shortages. These vessels never arrived in Venezuela;
WHY: Nevertheless, Venezuela’s government has instead, they were confiscated by US officials at
The move is sure to irk remained defiant, declaring its unwillingness to sea in mid-August and redirected to a US port.
the US government, which give in to the US campaign to topple the social- Information posted on shipping traffic websites
has discouraged trade ist government of President Nicolas Maduro. It indicates that all four have unloaded their car-
with both Tehran and has also turned to Iran, which is also under US goes and moved on to their next assignments.
Caracas. sanctions, for help. The third fleet consisted of three ships. All of
That help has taken various forms, including these were initially said to be loaded with Ira-
WHAT NEXT: but not limited to shipments of Iranian fuel to nian gasoline, but Bloomberg and other agencies
Washington may step up Venezuela by tanker and deliveries of Iranian reported earlier this week that the vessels were
enforcement of sanctions refinery parts and equipment to Venezuela by actually carrying gas condensate, a light hydro-
and seize more Iranian plane. Within the last week, though, the parties carbon that can easily be refined into gasoline. In
cargoes. have expanded the range of joint activities to any event, they did arrive in Venezuela last week
include Iranian-assisted exports of Venezuelan and delivered their cargoes to PdVSA for domes-
crude oil. If they continue to do so, the US gov- tic consumption.
ernment is likely to react.
Third time’s the charm
Three fleets The ships of the first and second fleets appear
Iran has sent three tanker fleets to Venezuela so to have had no involvement in two-way trade.
far this year, according to press reports. That is, they may have been loaded with Iranian
The first fleet consisted of five vessels, all filled gasoline for delivery to Venezuela, but they were
with Iranian gasoline. These ships arrived at a not loaded back up again after discharging their

Week 38 24•September•2020 www. NEWSBASE .com P5