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| Iraq |
| Iraqi diesel flowing freely |
| 2003-07-17 |
| From al-Jazeerah: Iraqi diesel has emerged as a major attraction in UAE markets in the post-Saddam Hussain era. The chaos on the administration front and a difficult law and order situation have added a new dimension to the diesel business, which has flourished with the lifting of UN sanctions. During the past few weeks the Iraqi diesel supply business has become so lucrative that some operators have bought back the old vessels they had sold for scrapping. Sources in the petroleum product market told Gulf News that the sudden jump in the Iraqi diesel supply business has raised demand for vessels 4,000 DWT to 5,000 DWT in size, which is considered ideal for transporting diesel. The operators familiar with the sea route in the Gulf use small capacity vessels to transport diesel to the UAE. Sometimes, diesel transporters use cargo vessels to take cars and other commodities from the UAE and bring back diesel, said sources. Ah, free trade. Just search the boats, OK? The competitive price of diesel is the major attraction for local buyers. A major portion of Iraqi diesel is used for blending purposes, they said. Some local companies based in various emirates use Iraqi diesel for this purpose, and the final product goes to the market through private channels. The removal of UN sanctions has come as a major blessing for operators, who do not face many security-related problems on the sea route. Only the Iranian territorial waters in the Gulf are considered a difficult area as Iran has been maintaining a close vigil after the fall of Saddam Hussain’s regime. I’ll bet they are. The Iraqi diesel business is considered a major challenge to established retailers, who do not have the freedom to sell the product at the market rate. Get your non-OPEC price controlled diesel right here. The competitive price depends largely on the supply of diesel from Iraq. According to sources, the price sometimes rises as much as 40 per cent above the price commanded by Iraqi diesel. I think he’s trying to say that Iraqi diesel is up to 40 percent cheaper than what the other states charge. Bet the Saudis and Iranians don’t like that. |
| Posted by:Steve |
| #3 another nitpick doesnt OPEC just have quotas on crude, not product? I guess that would leave refinery construction as a way around quotas, but thats a pretty long term thing and something they probably take into account when setting the crude quota. |
| Posted by: liberalhawk 2003-7-17 3:54:02 PM |
| #2 Anal-retentive math nitpick: If the "competitive" price is 40% more than the smuggled Iraqi price, then the Iraqi price is about 72% of the competitive, meaning a savings of 28%, if I understand correctly. [Ratio is 140:100, or 7/5, so reverse ratio is 5/7] |
| Posted by: Dar 2003-7-17 3:30:13 PM |
| #1 I'm sure they hate it, and will try and force Iraq into OPEC again. |
| Posted by: mojo 2003-7-17 2:49:27 PM |