Fuel made from Iranian oil is legally powering thousands of flights a year out of Dubai's booming airport, despite U.S. pressure on buyers to shun Tehran's petroleum exports, Reuters reported.
It may even fuel U.S. allied military jets in the Middle East. Washington and the European Union have slashed Iran's exports in half over the last year by leaning on importing countries to find
alternative feedstock for their refineries.
Meanwhile, close U.S. ally Dubai, long a major user of Iranian light oil known as condensate, continues to process tens of thousands of barrels a day at an Emirates National Oil Company (ENOC) refinery, according to oil industry sources and shipping data.
ENOC then pumps the resulting fuel to Dubai airport, the world's second busiest.
ENOC's chief executive declined to comment this week on how much Iranian oil the company was still importing and ENOC media relations did not respond to repeated requests for comment.
U.S. and European companies are not allowed to buy any Iranian refined oil products, under tough sanctions imposed by Washington to force Tehran to stop its nuclear activities.
But any airline is free to use fuel made from Iranian oil in other countries, because once it passes through a refinery outside Iran it is no longer considered of Iranian origin under sanctions.
"In our view jet fuel from an Emirati refinery is Emirati jet fuel, it is not Iranian no matter what it was made from," a U.S. government official in Washington said.
ENOC says it is the largest provider of jet fuel at Dubai International Airport (DXB) and that its portfolio boasts a growing number of military customers.
One such customer is the U.S. Defense Logistics Agency (DLA) which supplies planes at the Al Minhad airbase near Dubai, a hub for U.S.-allied forces in the Middle East.
"DLA Energy does contract with ENOC International Sales, LLC to supply jet fuel to Al Minhad Air Base," a spokesman for the U.S. Department of Defense said. "The contract was let in August 2011. This contract expires in August 2013."
It is not clear whether or not some of the fuel ENOC supplies under contract to the DLA come from ENOC's Jebel Ali refinery near Dubai. A western government source said ENOC also buys some fuel produced in refineries in Bahrain and Kuwait.
ENOC did not comment on whether some or all the fuel it supplies to the DLA is produced at Jebel Ali.
But ENOC's website says most of the jet fuel it supplies to the airport is pumped through a 60,000 barrel per day (bpd) pipeline from the refinery, and demand at the world's fastest growing airport is rising so much that it is laying a second pipeline.