Iranian tankers stranded by threat of US sanctions

A tanker prepares to dock at the Iranian oil facility on Kharg Island, in the Gulf. (AFP)
Updated 13 September 2018
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Iranian tankers stranded by threat of US sanctions

  • Two Iranian oil tankers floating off the UAE for a month as US sanctions take effect
  • The build-up in Iranian oil supplies underscores the pressure that Iran is facing as Washington aims to bring Iranian oil exports down to zero

DUBAI: Two tankers carrying Iranian condensate, a type of ultra-light oil, have been floating off the UAE for about a month as demand for the oil fell ahead of US sanctions.
The tankers, carrying about 2.4 million barrels of South Pars condensate combined, were stranded after South Korea halted imports from Iran and China’s demand fell during summer, according to industry sources and shipping data.
The build-up in Iranian oil supplies underscores the pressure that Iran is facing as Washington aims to bring Iranian oil exports down to zero to force Tehran to re-negotiate a nuclear deal.
The Very Large Crude Carrier (VLCC) Felicity loaded condensate at Iran’s Assaluyeh port in early August and then set sail for Jebel Ali in the UAE, shipping and trade flows data on Thomson Reuters Eikon showed.
It arrived at the ship-to-ship transfer area off Dubai on Aug. 7 and has been anchored there since. Similarly, the Suezmax tanker Salina also loaded oil at Assaluyeh and has been circling in the same area off Dubai since Aug. 17, according to the data.
Oil processors in South Korea, Iran’s top customer for South Pars condensate, halted Iranian oil liftings in July as banks, insurance and shipping companies wound down business related to Iran before US sanctions on the country’s petroleum sector kick in on Nov. 4. China typically cuts South Pars condensate imports in the summer because of its foul smell, the sources said.
The condensate contains high levels of a sulfurous compound known as mercaptans that require additional processing by refiners to remove. “Taking a cargo to China now when China may not want it means it may lose a cargo to India,” a US-based trader said. “So the cargoes will stay in place until they need to leave on agreed delivery period.”
Emirates National Oil Company (ENOC), another buyer of Iranian condensate, has been asked by the UAE government replace Iranian supply with imports from other countries, one of the sources said.
The National Iranian Oil Co. and ENOC did not respond to requests for comment. The number of ships loaded with Iranian oil and anchored off the loading port of Kharg Island and the Souroush oil field has also risen.
Three supertankers capable of carrying 2 million barrels, the Happiness I, MT Hedy and Humanity, have floated for 10 days or more while another four have been there for less than a week. Iran’s August crude and condensate exports fell to 67.7 million barrels, the lowest since April 2017, according to data from Thomson Reuters Oil Research and Forecast.


Siemens CEO pushes plans to boost Iraqi power infrastructure

Updated 23 September 2018
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Siemens CEO pushes plans to boost Iraqi power infrastructure

FRANKFURT: Siemens said its boss Joe Kaeser met Iraq’s prime minister on Sunday to discuss a proposal by the German company to expand the Middle East nation’s power production.
The German engineering group said it was proposing a deal to add 11 gigawatt (GW) of capacity over four years, saying this would boost the country’s capacity by nearly 50 percent.
It did not give a value, but such a contract would be worth several billion euros based on previous comparable deals.
Iraq has a wide gap between electricity consumption and supply. Peak demand in the summer, when people turn on air conditioners due to high temperatures, is about 21 GW, far exceeding the 13 GW the grid is currently provides, experts say.
Kaeser said in a statement after meeting Prime Minister Al-Abadi that they had “discussed the comprehensive Siemens roadmap to build a better future for the Iraqi people.”
“In Egypt, we have done the same and successfully built up the power infrastructure in record time with the highest efficiency,” he said.
In 2015, Siemens signed an 8 billion euro ($9.4 billion) deal with Egypt to supply gas and wind power plants to add 16.4 gigawatts of capacity to the country’s power grid, marking the group’s single biggest order.
The proposal for Iraq, first pitched in February, would include cutting Iraq’s energy losses, introducing smart grids, expanding transmission grids, upgrading existing plants and adding new capacity.
The group would also help the government secure funding from international commercial banks and export credit agencies with German government support, creating thousands of jobs in Iraq.
Siemens would donate a $60 million grant for software for Iraqi universities, it said.