Gulf News reported that Emirates National Oil Company may have to stop importing condensate from Iran unless Washington grants it an exemption or temporary exception from this week's tightening of US sanctions.

US State Department officials said that financial transactions that facilitate the import of Iranian condensate are liable to a new round of measures effective June 28 that aim to cut Iran's oil revenues and force Tehran to drop its disputed nuclear program.

The fresh sanctions target condensate, produced in association with gas which is Tehran's second biggest source of export revenue after crude and refined products which were targeted in earlier sanctions. But two Gulf based sources close to the company said Enoc had already applied for an exception. The US State Department declined to confirm or deny this.

Industry source said that "I am sure they are petitioning for a temporary exemption and this could apply for 6 months if not a bit longer. Thereafter they need to find an alternative.”

A Dubai industry source said that "Almost everything they put in that refinery is Iranian condensate. They would either have to shut down if they stop or find an alternative.”

Shipping data showed that Dubai accounts for at least half of Iran's condensate exports, which averaged 220,000 barrels per day in the first four months of the year. Most of the condensate comes from Iran's South Pars gas field in the Gulf. Its other buyers include China, Japan and Singapore.

Mr Robin Mills head of consultancy at Dubai-based energy consultancy Manaar said that "If Enoc's condensate acquisition costs were to increase by USD 1 per barrel as a result of sanctions, for example, this would cost them USD 44 million per year. That's not really significant compared to the USD 1.5 billion they have lost on subsidized petrol sales in recent years. Perhaps more significant is that the Iranians were probably giving them easy credit terms on purchases, as with Greece."

Source - Gulf News

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