Page 9 - DMEA Week 03 2022

DMEA POLICY & SECURITY DMEA

Iran claims rise in ‘grey’ oil sales

MIDDLE EAST IT is widely accepted on the markets by now that restore relations with Tehran at least to the point
grey market oil sales to China by Iran have been where a revival of the 2015 nuclear deal—which
a major factor in helping Tehran dodge US sanc- would lift sanctions on Iran in return for a curb-
tions put in place to block Iranian crude sales ing of the country’s nuclear development pro-
around the world. Entirely reliable data on how gramme—can be achieved.
much oil Iran has been able to export despite the On January 14, Iran and China launched
sanctions remains out of reach, but the country’s the 25-year economic and political cooperation
oil minister, Javad Owji, claimed at the weekend agreement they agreed in March last year. Dur-
that the Iranians have enjoyed a dramatic rise ing the launch, Beijing reaffirmed its opposition
in crude oil, gas condensate and petrochemical to unilateral sanctions imposed by the US against
sales in the past 10 months. Iran. The commencement of the deal—widely
Addressing lawmakers in Tehran, Owji stated regarded as a roadmap that could allow for many
that Iran’s budget for the next Persian calendar billions of dollars of trade and investment if it is
and fiscal year (starting March 21) factors in fully utilised—indicates expanded Iranian oil
daily oil sales of 1.2mn barrels, the oil ministry’s sales to China, with attractive discounts, could
official Shana energy news agency reported on be ahead.
January 16. The Iran newspaper on January 15 cited oil
China remains Iran’s only known customer ministry and Central Bank of Iran (CBI) data in
for its oil, but since Joe Biden took over from reporting that Iran’s oil revenues amounted to
Donald Trump as US president a year ago, Ira- $18.6bn in the past six months, up around $10bn
nian officials have occasionally indicated break- y/y. Its report also mentioned how more coun-
throughs in other markets. Wider sales may tries were now accepting Iranian oil. However,
have been made possible due to a relaxation in where Iranian crude exports of the past few years
US enforcement of oil sanctions applied to Iran are concerned, nobody has the whole story. Teh-
and its customers as Washington attempts to ran would not like to see all sales on the radar.™

REFINING

Another fire at Al-Ahmadi

MIDDLE EAST DOWNSTREAM-FOCUSED Kuwait National facilities to 800,000 bpd, while improving envi-
Petroleum Co. (KNPC) this week dealt with the ronmental performance and facilitating the
second major fire at its 346,000 barrel per day production of cleaner fuels in line with Euro-IV
(bpd) Mina Al-Ahmadi refinery since October. and Euro-V standards. KNPC, a subsidiary of
In a statement on social media, the company Kuwait Petroleum Corp. (KPC), launched full
said that the fire broke out during scheduled operations on the CFP in September following
maintenance on the facility’s gas liquefaction a lengthy development process.
unit number 32. Speaking to the Kuwait News Just a few weeks later, KNPC announced that
Agency (KUNA), the company’s deputy CEO of an explosion had occurred at Mina Al-Ahmadi,
Admin and Commercial and KNPC spokesman causing a fire and injuring several workers.
Ahed Al-Khurayif said that domestic supply of Again, though, there was no operational impact.
oil products and exports had continued unaf- The fire broke out at Mina Al-Ahmadi’s 33,000
fected “as the damaged unit [was] already out of bpd atmospheric residual oil desulphurisation
service for maintenance”. (ARDS) unit number 42 within the old part of
He noted that while KNPC and the Kuwait the refinery.
Fire Force had brought the fire “under control Elsewhere in the country, fellow KPC affili-
in a record time”, KNPC “expressed deep regret ate Kuwait Integrated Petroleum Industries Co.
for the death of two workers and the injury of (KIPIC) is nearing completion on the project it
another 10 of the contractor’s Asian nationals was set up to manage, the new Al-Zour refinery
with burns of different degrees”. The injured that is expected to come on stream in Febru-
workers were taken to hospitals at Adan, Batain, ary. Adding a further 615,000 bpd to Kuwait’s
Farwaniya and Mubarak. refining capacity, the project is estimated to cost
Al-Khurayif added that KNPC would set up a around $16.1bn, including the cost of associated
committee to identify the causes of the fire. petrochemical and LNG facilities.
Alongside the larger Mina Abdullah unit, Once complete, Al-Zour will take Kuwait’s
Mina Al-Ahmadi was the focus of the Clean throughput capacity to 1.415mn bpd, while the
Fuels Project (CFP), a $15.6bn programme to country has previously spoken of plans to reach
increase combined throughput capacity at the 2mn bpd.™

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