Petronas Halts Fuel Sales to Iran as Sanctions Loom
Malaysia's Petronas has stopped supplying gasoline to Iran, a company spokesman said on Thursday, as the threat of U.S. sanctions on oil firms with supply ties to the Islamic Republic looms large, ABC news reported.
Iran is the world's fifth biggest crude oil exporter but U.S. sanctions mean it has suffered from lack of investment in refineries, forcing the OPEC member to import some 40 percent of its gasoline needs.
Malaysia's state oil firm has stopped supplying gasoline to Iran since the middle of March, the Petronas spokesman told Reuters.
Petronas gave no reason for the pullout but an industry source in Dubai said the company wanted to safeguard its business exposure in the United States.
On Monday, Malaysian Prime Minister Najib and U.S. President Barack Obama agreed on the importance of Iran strictly abiding by its obligation under international nuclear non-proliferation pacts.
"The threat of sanctions has sent a clear message to the energy sector. The United States is serious about passing and enforcing comprehensive energy sanctions against the Iranian regime," said Mark Dubowitz, executive director of a Washington-based think-tank.
"The focus of the sanctions debate soon will shift to sanctions enforcement and a game of "whack-a-mole" between US authorities and Iran's energy partners."
Several of the world's top oil companies and trading houses have already curbed sales to preempt potential penalization of their U.S. operations.
LUKOIL, Russia's No. 2 oil company, this month joined a growing list of international oil and trading firms that has stopped gasoline sales to Iran.
In March, Royal Dutch Shell announced that it had stopped gasoline supplies to the Islamic republic, joining two of the world's largest independent trading companies, Glencore and Vitol, who had taken similar decisions.
Iran bought around 128,000 barrels per day (bpd) of gasoline in March, steady with imports the previous month, traders said.