IEA says Iran may not sustain gasoline output rise

IEA says Iran may not sustain gasoline output rise

IEA says Iran previously relied on imports to cover 30% demand.

October 13, 2010 2:32 by Reuters

Iran may not be able to keep up its announced strategy of converting petrochemical plants to increase its production of gasoline, the International Energy Agency said on Wednesday.

The Gulf country for the first time exported gasoline with low 75 research octane number (RON) in August, Reuters reported, after government officials told domestic news services that it had become self sufficient and started to export.

Iran, the world’s fifth-largest crude oil exporter, has had to import gasoline due to lack of sufficient refining capacity, making it vulnerable to a new wave of international sanctions intended to discourage Tehran from nuclear activity.

“Even assuming that self-sufficiency has been fully achieved, increasing gasoline output at the expense of other petrochemicals is arguably unsustainable,” the IEA said in its monthly market report

“A shortage of several key petrochemical products has emerged, thus merely shifting around – rather than solving – the problem of insufficient oil product supplies,” it said.

“More ominously, Iran is unlikely to be able to carry out the necessary refining investments that would address this issue in the medium term, given the constraints imposed by international sanctions,” the report added.

The IEA said Iran relied on imports to cover about 30 percent of its gasoline demand for the first seven months of this year.

Import volume may fall to as low as 25,000 barrels per day in August and September, compared with about 85,000 bpd in July, the agency said, citing “various sources”. (Reporting by Ikuko Kurahone, editing by Jane Baird)