Gasoline Swap With UAE for Iraq

Gasoline Swap With UAE for Iraq
Gasoline Swap With UAE for Iraq

The first corridor to transit gasoline from the UAE and Iran has become operational with the first tanker carrying the gasoline to oil terminals in south Iran, Mehr news agency reported.

Vice-President Eshagh Jahangiri, by the approval of the Supreme Council of Economy, passed a regulation last week according to which the oil ministry is authorized to swap crude oil with super gasoline produced in other countries.

Following this regulation, transit of gasoline commenced from south Persian Gulf states to Iraq.

According to reports, two tankers delivered and stored the gasoline from UAE refineries, in Bandar Abbas, southern coast of Iran.

Although the agreement is for two consignments to be transported directly to Iraq and the Kurdistan Regional Government (KRG), the private sector delivers the two consignments to the national distribution network in Iran, an equivalent is then sent from Iran to Iraq.

This is the first time gasoline from the Persian Gulf states is being transferred to Iraq.

The trilateral cooperation has taken place at a time when the activities of the Islamic State (IS) have disrupted gasoline distribution in parts of Iraq.

Northern Iraq, one of the most oil-rich regions in the world, faces a fuel shortage after IS militants overran large parts of the country, including Baiji, a key refinery.

The militants have gained full control over Iraq’s main oil refinery at Baiji, south of Mosul, which refines the country’s crude into petroleum for domestic consumption, sparking fears of shortages.

Although Iran has set the gasoline price in the western borders to 35,00 rials ($1.3), transit from the UAE and other Persian Gulf states could cap the gasoline crisis in Iraq.

Seyed Hamid Hosseini, a member of the petroleum products association, said private companies are able to transport or swap gasoline from the Persian Gulf states. Noting the storage limitations in western parts of Iran, Hosseini said Iran should maximize on the opportunity to swap and deliver gasoline to Iraq in order to secure the Iraqi fuel market.

Hosseini has previously announced that the swapping of oil products to Iraq was halted due to security reasons.