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Iran May Halve March Fuel Oil Exports on Abadan Maintenance

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Feb. 6 (Bloomberg) -- Iran may reduce fuel oil exports by 50 percent next month as maintenance work at the Persian Gulf state’s Abadan refinery cuts output, according to an official at National Iranian Oil Co.

The country may ship about 200,000 metric tons of fuel oil in March, compared with as much as 400,000 this month and 350,000 tons in January, said the official, who asked not to be identified because of internal company rules.

The state-run company, known as NIOC, plans to shut half of its 390,000 barrel-a-day Abadan refinery for 20 to 30 days next month, said the official. The maintenance plan isn’t final and may change, according to the official.

The Middle East nation reduced fuel oil exports to an average of 200,000 tons a month in the quarter ended Dec. 31 from about 600,000 tons earlier in the year as demand from domestic power plants climbed during winter, the official said in November.

Asia fuel oil’s discount to Dubai crude narrowed 94 cents, or 11 percent, to $7.95 a barrel as of 11:02 a.m. Singapore time, according to PVM Oil Associates Ltd., a London-based broker. The so-called crack narrowed first time in five days, indicating reduced losses from producing the residue product.

The U.S. and its allies agreed in November to scale back measures targeting Iran’s exports in return for it curbing its nuclear program. The EU lifted a ban on insurance for tankers that carry Iranian crude and the U.S. said it will refrain from forcing buyers to cut purchases further, while both maintained restrictions on importing the nation’s oil.

Iran and six major powers are scheduled to meet Feb. 18 in Vienna, following the implementation last month of the interim deal. Foreign Minister Mohammad Javad Zarif said that a final agreement on the country’s nuclear program must include the complete removal of all sanctions.

To contact the reporter on this story: Winnie Zhu in Singapore at wzhu4@bloomberg.net

To contact the editors responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net; Mike Anderson at manderson34@bloomberg.net