EXCLUSIVE Iran resumes fuel exports to neighboring Afghanistan

Traffic jams and crowds are seen near Kabul Airport in Afghanistan 16 August 2021. SATELLITE PICTURE 2021 MAXAR TECHNOLOGIES / Handout via REUTERS.

LONDON, Aug. 23 (Reuters) – Iran resumes fuel exports to Afghanistan a few days ago following a request from the new Afghan government, which feels empowered by the US withdrawal to buy the sanctioned nation’s oil more openly, an Iranian official said to Reuters.

The Sunni Muslim group seized power in Afghanistan last week as the United States and its allies withdrew troops after a 20-year war.

The price of gasoline in Afghanistan reached $ 900 per barrel. tons as many Afghans drove out of cities, fearing reprisals and a return to a harsh version of Islamic law introduced by the Taliban when they were in power two decades ago.

To counter the rise in prices, the new Taliban asked Shia Muslim Iran to keep its borders open to traders.

“The Taliban sent messages to Iran saying ‘you can continue exporting oil products’,” Hamid Hosseini, board member and spokesman for Iran’s Oil, Gas and Petrochemical Products Exporters’ Union, in Tehran, told Reuters.

The Taliban sent messages to Iranian traders and to an Iranian chamber of commerce that has close ties to the government.

As a result, the Islamic Republic of Iran’s Customs Administration (IRICA), which is part of the government, lifted a ban on fuel exports to Afghanistan, which had been in place since August 6, due to Iran’s concerns about the security of trade in the country.

These concerns have been alleviated by the Taliban’s stance, Hosseini said.

He also quoted the Taliban’s decision to cut tariffs on fuel imports from Iran and other neighboring countries and shared with Reuters an official document issued by the Islamic Emirate in Afghanistan – the name by which the Taliban refers to itself.

The document specified a 70% rebate on customs duties on imports of petrol, diesel and LPG from neighboring countries to Afghanistan.

IRAN-TALIBAN COOPERATION

Iran sits on the world’s fourth largest oil reserves, but the latest round of US sanctions imposed by former US President Donald Trump in 2018 has significantly reduced Iranian oil exports.

Iran has nevertheless managed some trade, especially by transporting fuel to neighbors like Afghanistan, and the U.S. troop withdrawal has made leaders of both Iran and Afghanistan less nervous about acting more openly, Hosseini said.

The main Iranian exports to Afghanistan are gasoline and gasoline. Iran exported about 400,000 tons of fuel to its neighbor from May 2020 to May 2021, according to a report released by PetroView, an Iranian oil and gas research and consulting platform.

Iranian fuel flows have been crucial to Afghanistan for the past few years, according to traders and an Afghan government report, seen by Reuters.

Between March 2020 and March 2021, Iran accounted for $ 367 million of imports, mainly fuel, according to the report prepared by the Afghan Ministry of Finance, chambers of commerce and data from private companies.

The next two main oil suppliers are Turkmenistan and Uzbekistan with trade, mostly oil, worth $ 257 million and $ 236 million respectively.

A source with direct knowledge of the case, who asked not to be named, said more than 1 million tons a year, or over 20,000 barrels a day, of Iranian fuel goes to Afghanistan.

EXPAND COOPERATION?

The main destinations for Iran’s fuel have been eastern provinces near the Iranian border, and southern regions such as Kandahar and Nimrooz, where the Taliban had a strong influence even before the advance of recent weeks, Hosseini said.

“I think the new Iranian government will significantly expand cooperation with the Taliban government. Iran can easily double its trade with Afghanistan. The government of (Ashraf) Ghani always tried to limit cooperation with Iran when Iran was under US sanctions, said Hosseini. .

Afghanistan has not developed its own oil industry. The country has six mini-refineries that only produce several thousand barrels a day with refined products each.

They run on light oil from Turkmenistan, whose two refineries also directly supply diesel and jet fuel.

Uzbekistan’s two main refineries also supply refined products by rail and truck.

The source of direct knowledge said that supplies of Turkmen condensate (light crude oil) had ceased a month ago due to the safety situation, but predicted that it would resume in about two weeks.

“The problem is that the banks stopped working three days ago so we can be back to bags of cash,” the source said.

Reporting by Bozorgmehr Sharafedin and Julia Payne in London; Edited by Edmund Blair and Barbara Lewis

Our standards: Thomson Reuters Trust Principles.

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