Facing Export Sanctions, Iran Wants to Sell More Bunker Fuel

 

Iran has announced plans to target the bunker fuel market in the Persian Gulf, with mounting sanctions limiting its global oil trade. Last week saw a fresh round of sanctions by the U.S government, aimed at slowing Iranian oil exports to China. With these market barriers, Iran sees an opportunity in expanding bunker fuel services at Qeshm Island.

According to a report by the state-controlled Fars news, the Iranian government wants to build four major refineries in Qeshm, each with a capacity of processing 140,000 barrels of oil per day. This hoped-for project is intended to increase the supply of bunker fuel and gasoline at the island’s terminals. No timelines were provided for the project.

The Salakh port, located to the south of the island, is already supplying 50,000 metric tons of bunker fuel to ships. The first phase of the bunkering terminal at the port came online back in 2017.

With the new refineries, the Iranian government said that the bunker capacity will increase to 750,000 metric tons per month. In addition, there is a long-term project to increase the Island’s storage capacity to 100 million barrels of oil.

Based on the island’s strategic location in the Strait of Hormuz (a transit route for over 20 percent of the global trade), Iran believes that Qeshm is poised to capture a larger share of over $30 billion in bunkering revenues generated in the region. In a year, more than 50,000 ships operate within the Persian Gulf for trade and energy services. Iran hopes that a bunkering hub in Salakh port would be competitive with Fujairah, which is the top bunker spot in the Gulf region.