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LPG, Mazut Exports Decline

LPG, Mazut Exports DeclineLPG, Mazut Exports Decline

As the temperature goes up in hot summer days, the demand for mazut and liquefied petroleum gas declines. Nevertheless, other oil products are being exported ideally, said Hassan Khosrojerdi, the head of Petrochemical, Gas and Oil Exporters' Union.

"When oil price was low, countries used to purchase mazut and mix it with the crude prior to using it. There is no incentive to do so anymore, as it is not economically viable." the official said, adding that each ton of mazut costs $300, ILNA reported.

According to the official, although mazut is less expensive than oil, its price is still within a reasonable range.

Elaborating on the causes of LPG export reduction, Khosrojerdi noted that in addition to the rise in temperature, the number of foreign ships to carry LPG is limited because they cannot approach Iran's borders due to international sanctions. Furthermore, Iran's LPG fleet is not large enough. He noted that Iran's LPG is exported to India, Pakistan, China and Africa.

"Termination of sanctions and removal of banking constraints will facilitate oil product exports since lines of credits can be opened in Iran, which will result in a 15 to 20% increase in petrochemical exports," he said.

According to Oil Ministry officials, surplus mazut capacity amounts to 41 million liters per day, which are either sold via bunkering centers in the Persian Gulf or exported to the Port of Fujairah in the UAE.

Produced from the remains of raw oil processing, mazut is graded as heavy furnace oil that is produced from the low sulfur raw oil.

Tehran is under punitive economic sanctions because of its nuclear program. After marathon talks in Lausanne, Switzerland, Iran and P5+1 (Britain, China, France, Russia, the US plus Germany) reached a framework agreement on April 2 that calls for lifting all trade sanctions against Iran. The details of the agreement are to be finalized by a June 30 deadline.

      

 

Financialtribune.com