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Iran Ships Fuel Oil Via Iraqi Ports - Lloyds Intelligence

The port of Al-Basra oil terminal in the waters of the Northern Arabian Gulf close to the port town of Umm Quasar in Basra. FILE PHOTO

Lloyds Intelligence says, "Deceptive shipping practices from offshore loadings from the Iraqi port of Khor al-Zubair reveal hidden cargoes of sanctioned Iranian fuel oil are being shipped to Malaysia and Fujairah."

About 2.1m tons of oil derivatives were loaded from the offshore port limit of the Iraqi port Khor al-Zubair in January, Lloyd's List Intelligence data shows. Subsequently, the shipment was exported to the United Arab Emirates (UAE) and partly to Malaysia as Iraqi fuel oil.

Although fuel oil is not specifically sanctioned by the United States, but if Iran sells the product directly to other countries it cannot receive U.S. dollars and in general it has a tough time conducting business through banks and insurance companies. This could be one reason why it uses Iraq as a conduit to export fuel oil.

In addition, Iran also exports the low-quality fuel directly. Radio Farda's data provided by Kpler also shows that UAE has been the primary destination for two-thirds of directly shipped Iranian fuel oil, and one-tenth of the product was delivered to Malaysia.

After Iran added the Persian Guld Star new refinery, it was expected that its direct fuel oil exports will increase but apparently this did not happen, indicating that some exports are conducted indirectly through third parties.

Persian Gulf Star Refinery, also known as Bandar Abbas Gas Condensate Refinery, is being developed near Bandar Abbas, south of Iran. It has a processing capacity of nearly 360,000 barrels of gas condensate a day.

According to Lloyds, a spike in fuel oil exports from Iraq's Khor al-Zubair export terminals accompanied by subterfuge shipping practices used by tankers which load there reveal hidden flows of Iranian oil cargoes being shipped to the bunkering center off Fujairah and to floating storage off Malaysia.

Moreover, Lloyds has disclosed that along with rising exports, there are increased numbers of tankers seen "going dark" — switching off their Automatic Identification System — while in the off-port loading area, suggesting ship-to-ship transfers are undertaken in this way to disguise the identity of the other ship and the cargo’s origin.