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Iran says global gasoline market over-supplied
Gasoline was key target of US, EU sanctions.
September 13, 2010 12:55 by Reuters
Iran, under sanctions that affect its ability to import gasoline, believes the market for the fuel is oversupplied and that buyers, not sellers, are setting conditions, its OPEC governor said on Monday.
“Currently the number of buyers in the market is limited and it is a buyer’s market and not a seller’s (market),” Mohammad Ali Khatibi was quoted as saying by Iran’s official news agency IRNA.
“In a way it is the buyer who determines the conditions for the supply of this product in the market.”
Iran is the world’s fifth-largest oil exporter but a lack of refining capacity and sanctions hindering access to foreign capital and know-how have forced the country to import up to 40 percent of its automotive fuel needs.
That vulnerability was targeted by new sanctions from the European Union and the United States imposed to pressure Iran to curb its nuclear programme. A U.S. threat to sanction companies supplying Iran has reduced the pool of sellers.
But Khatibi said there was no shortage of supply.
“Considering that the high-consumption season for summer travel has come to an end, there are plenty of gasoline sellers who want to market their gasoline,” he said.
Iran has consistently said sanctions are having no negative impact and, rather than damaging the economy, they are spurring domestic industry and have reduced reliance on imports.
Last week Oil Minister Massoud Mirkazemi was reported as saying Iran had already become self-sufficient in gasoline, something traders outside Iran said they thought was unlikely.
Conservative newspaper Resalat reported on Monday that Iran had imported more than 1.64 million tonnes of gasoline during the last month.
Over the last five months it had bought more than 3 million tonnes from 10 different countries: the United Arab Emirates, Turkey, Turkmenistan, the Netherlands, Singapore, Oman, Saudi Arabia, India, Russia and France, it said.
Reuters reported in August that Iran was paying a premium of around 25 percent for its imports even before U.S.-led sanctions took full effect.
Imports in July fell far below the seasonal norm after sanctions came into force, trade sources said.
In a separate report on Monday, the official in charge of jet fuel at the Oil Ministry said suppliers of that product were trying to use the sanctions to overcharge Iran, pushing the country to pursue new means of production.
“The emergency production of gasoline, and also aviation fuel, began at the country’s petrochemical units in light of efforts by international suppliers of this commodity to overcharge Iran due to the sanctions,” the semi-official Fars new agency quoted Faribourz Panahi as saying.
Panahi said Iran had developed a “simple technology”, which he said was already used in the United States, to produce jet fuel “at one seventh of the current market price”.
(Writing by Robin Pomeroy; editing by Keiron Henderson)