News / Economy

Dubai Flights Rely on UAE-Refined Iranian Oil

Logo of Emirates airline on the wing of one of its airplanes after takeoff from Dubai airport, United Arab Emirates, April 16, 2013.
Logo of Emirates airline on the wing of one of its airplanes after takeoff from Dubai airport, United Arab Emirates, April 16, 2013.
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.
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.
Executive order

Iran exported about $7.5 billion worth of condensate from its main export facility at South Pars in the year ended March 20, 2013, according to Iranian media reports.
ENOC was the biggest buyer of Iranian condensate in 2012, when its imports rose to an average of 127,000 bpd, according to analysts' estimates.
An executive order issued on July 31, 2012, gives U.S. President Barack Obama the option to impose sanctions on buyers of Iranian condensate, but only if the U.S. believes there is sufficient alternative supply to permit a significant reduction in volumes from Iran.
ENOC announced in February it had secured about 20,000 bpd of condensate from Qatar to feed its 120,000 bpd refinery and said it was working to find more alternatives.
The company has not announced further substitution deals, suggesting it has not yet found long-term alternative supplies.
Ship tracking data on Reuters shows a vessel able to carry around a million barrels of oil shuttles between the refinery and South Pars once a week. A full tanker would carry enough to run the refinery at capacity for about a week.
With shrinking export options, traders say Iran is likely to be selling its condensate fairly cheaply, helping ENOC offset multi-million dollar losses it has to take because it is obliged under UAE law to sell gasoline at a subsidized rate.
Dubai has been a key trading partner for Iran for decades, but the UAE is also one of Washington's closest allies.
The UAE is the largest export market for the United States in the Middle East, with Dubai flagship airline Emirates alone having placed a $24 billion order with Boeing in 2011, according to the website of the UAE Embassy in Washington.
U.S. Defense Secretary Chuck Hagel is touring the Gulf this week, with the U.S. close to finalizing a deal to sell the UAE 25 F-16 Desert Falcon jets worth nearly $5 billion.
More on the way

Unless ENOC can find another 100,000 barrels per day of alternative supplies at competitive prices, the opening of a second pipeline due later this year could take more fuel made from Iranian oil into the tanks of international airlines.
The existing pipeline can carry around 9.5 million liters of jet fuel a day — enough to fill up 44 Boeing 747s a day or 16,000 a year, although most routes do not use a full tank.
ENOC is not the only jet fuel supplier, because its refinery and existing pipeline are not big enough to meet demand at DXB, where an average of around 470 flights a day took off in 2012.
Several western oil companies also supply jet fuel to the airport — Royal Dutch Shell, BP and Chevron — but they say they source it outside the UAE and in full compliance with sanctions on Iran.
Some U.S. and European airlines said they do not use ENOC when they call at Dubai, with some having global purchase deals with other suppliers.
But for many of the 130 airlines flying into Dubai, the fuel derived from Iranian oil that ENOC offers is indispensable.

You May Like

Video Americans, Tourists, Reflect on Meaning of Thanksgiving

VOA garnered opinions from several people soon after November 13 Paris attacks, which colored many of their thoughts

Video Thais Send Security Concerns Down the River

In northern Thailand, the annual tradition of constructing floating baskets to carry away the year’s bad spirits highlights the Loy Krathong festival

Video Tree Houses - A Branch of American Dream

Workshops aimed at teaching people how to build tree houses have become widely popular in America in recent years

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
After Paris Attacks, France Steps Up Fight Against ISi
November 24, 2015 3:04 AM
The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs

World Currencies


Rates may not be current.