Emirates National Oil Co., Dubai’s government-owned refiner, is seeking new suppliers of condensate to replace imports from Iran because U.S. sanctions threaten financial penalties for companies that trade with the country.
The refiner, known as ENOC, is “currently finalizing contracts” for condensate supply over coming years, ENOC said in an e-mailed statement yesterday. ENOC already buys condensate, a light hydrocarbon liquid found along with crude oil or natural gas, from the Persian Gulf state of Qatar, according to the statement.
The company operates a 120,000-barrel-a-day refinery at the port of Jebel Ali that processes condensate into jet fuel, diesel and gasoline reformate. Dubai, the commercial hub of the United Arab Emirates, has bought condensate from Iran, one of the region’s main suppliers of the fuel before sanctions over Iran’s nuclear program curtailed trade with the country.
The U.S. and European Union have targeted Iran’s energy and financial industries to force a halt in a nuclear program they say could be used to develop atomic weapons. Iran says it wants nuclear energy for civilian use only.
Iranian crude shipments will probably decline to about 1 million barrels a day in January, from more than 2 million before the measures took effect, and exports will remain low this year, the International Energy Agency said last month.
The U.S. threatens to deny access to its financial system to any lender or oil company doing business with Iranian energy companies or banks. EU sanctions stopped most shippers from buying insurance for tankers transporting crude or products from Iran.
ENOC’s comments coincided with a visit to Dubai and Abu Dhabi, the U.A.E. capital, by David Cohen, the U.S. Treasury Department’s undersecretary for terrorism and financial intelligence. Cohen planned to discuss enforcement of the sanctions against Iran and efforts to stop the Islamic republic from evading them, according to a notice on the Treasury Department’s website.
ENOC said it’s seeking to import condensate from suppliers in the Middle East and Asia.
Dubai doesn’t produce enough crude to meet domestic demand. Neighboring Abu Dhabi holds most of the U.A.E.’s crude reserves, about 6 percent of the global total.