An Inside Look At Iraq’s “Fuel Smuggling Market”: New Developments And Smugglers “Suffering”, 25 NOV

 An Inside Look At Iraq’s “Fuel Smuggling Market”: New Developments And Smugglers “Suffering”

Economy   2024-11-23 | 1,627 views   Sumerian News-Economy   Economic platforms specialized in energy information in the world revealed that they addressed...Iraq To Iran, and the request to prevent the passage of smuggled fuel tankers through the territory Kurdistan To Iran, after reaching Iraq to deal By raising the cost of a barrel of oil for foreign companies, and restricting export Oil and fuel exclusively through SOMO.

Economic reports said that the Iraqi Ministry of Foreign Affairs requested the authorities to...Iranian Preventing trucks carrying “oil, black oil and other petroleum products” from entering Iran through border crossing areas in the region. Kurdistan Iraq Unless exports are licensed by Iraq's state oil marketing company SOMO, according to a letter dated Nov. 12.

Reports quoting market sources say that a movement Bitumen and other petroleum products through the Haj crossing Imran- Piranshahr has already stopped due to the new directive, but Parviz Khan and Bashmakh border crossings are still exporting bitumen, but if this message is fully implemented, the exports will Iraq Of bitumen will be cut off because these producers do not have a license from SOMO.

The restrictions are expected to remain in place until further notice, although some market participants have expressed doubts about the effectiveness of the strict measures. The directives are expected to affect crude producers in the Kurdistan region, which have relied on local sales since the main export pipeline to Turkey was shut down last year.

Foreign operators working in the Kurdistan They have been transporting crude to local refineries since the pipeline was shut down, but data suggests Kurdish crude is also being smuggled – by truck – across the border to Turkey, Iran and Syria.

Bitumen market participants  in Iraq The smuggling ban, however, comes at a time when domestic supplies are already tight, due to limited availability of raw materials from refineries.

Not only are high margins encouraging Iraqi refiners to blend vacuum distillation residues to produce high-sulfur fuel oil, but the long blockade between Erbil and Sulaymaniyah, which began before the Kurdish elections in October, has made it difficult for bitumen producers to transport vacuum distillation residues from refineries to their production units.

Despite a reduction in freight rates to $10 per tonne last week to encourage bitumen producers to transport vacuum distillation residues, down from $35 per tonne when the ban began, most Kurdish suppliers have refrained from offering new export cargoes in the past three weeks.

A few Indian importers said it was becoming increasingly difficult to secure Iraqi bitumen barrels due to a lack of supply, and some bitumen suppliers have decided to step down in the hope that export values ​​will rise in line with higher Iranian sea freight rates.

Limited availability of spare parts has pushed up production costs for Iraqi bitumen suppliers, with producers saying Iraqi barrels will be offered at above $340 a tonne FOB Bandar Abbas in the coming days, compared with around $322-325 a tonne last week.

Market participants said one major producer in South Iraq It has stopped offering barrels since the end of October because high production costs have made export prices less competitive for major consumers such as India.   LINK