US curbs on Iran will hurt Dubai

ONE OF the unknowns in President Donald Trump’s decision to restore sanctions on Iran’s petroleum exports is whether the US will also restrict the country’s substantial sales of condensate.

The lack of clarity compounds a dilemma for Iran’s neighbour Dubai, potentially cutting off the emirate’s main refinery from the Middle East’s biggest supplier of condensate, a light oil found with natural gas.

Dubai’s government-owned refiner Emirates National Oil Company (Enoc) imports about three condensate cargoes a month from Iran, or the equivalent of more than 100 000 barrels a day.

If the US tries to curb Iran’s condensate sales – the Trump administration has not specified if it will – Dubai will have to find another supplier or risk penalties. And unlike the US energy sanctions in 2012-2015, this round coincides with a diplomatic dispute between Dubai and the region’s second-largest condensate exporter, Qatar.

The UAE, where Dubai is located, is one of four Arab countries that imposed an economic embargo last year on Qatar, accusing it of supporting terrorism.

Enoc chief executive Saif Al Falasi declined to comment last week about what he planned to do if the US targeted Iranian condensate sales.

Asked if Enoc had a plan for alternative supplies, he said, “not today”.

The last time it targeted Iran’s oil industry, the US sought to restrict exports except those made to six, mainly Asian, buyers. Dubai reduced its condensate purchases from Iran but some shipments kept flowing, and the emirate also bought from Qatar. – Bloomberg