Iran finds crucial lifeline for Afghanistan: Fuel | Business and Economy News


Iran resumed its fuel exports to Afghanistan a few days ago following a request from the new Afghan government, which feels empowered by the US withdrawal to more openly buy the sanctioned country’s oil, said an Iranian official at the Reuters news agency.

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

Gasoline prices in Afghanistan hit $ 900 a tonne as many Afghans were driven from cities over fears of retaliation and a return to a harsh interpretation of Islamic law imposed by the Taliban when they were in power there 20 years ago.

To counter the surge in prices, the new Taliban have asked Shia Iran to keep the borders open to traders.

“The Taliban sent messages to Iran saying, ‘You can continue to export petroleum products,'” Hamid Hosseini, board member and spokesperson for the Iranian Exporters Union of Iran, told Reuters. oil, gas and petrochemicals in Tehran. the recovery in Afghanistan on Tuesday.

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

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

These concerns were mitigated by the attitude of the Taliban, Hosseini said.

He also cited the Taliban’s decision to cut tariffs on fuel imports from Iran and other neighboring countries and shared with Reuters an official document released by the Islamic Emirate of Afghanistan – the name by which the Taliban refer.

The document specified a 70% discount on tariffs on imports of gasoline, diesel and LPG from neighboring countries to Afghanistan.

Treat more openly

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 significantly reduced Iranian oil exports.

Iran has nonetheless handled some trade, including trucking fuel to neighbors such as Afghanistan and the withdrawal of US troops has made Iranian and Afghan leaders less nervous about dealing more openly, said Hosseini.

The main Iranian exports to Afghanistan are gasoline and diesel. Iran exported around 400,000 tonnes 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 advisory platform.

Iranian fuel flows have been vital to Afghanistan in recent years, according to traders and an Afghan government report viewed by Reuters.

Between March 2020 and March 2021, Iran accounted for $ 367 million in imports, mostly fuel, according to the report by the Afghan Ministry of Finance, Chambers of Commerce and private company data.

The other two largest oil suppliers are Turkmenistan and Uzbekistan with mostly oil trades valued at $ 257 million and $ 236 million respectively.

A source with direct knowledge of the case, who requested to remain anonymous, said that more than one million tonnes per year, or more than 20,000 barrels per day, of Iranian fuel are being transported to the Afghanistan.

Double your business

The main destinations for Iranian fuel have been the eastern provinces near the Iranian border and southern regions like Kandahar and Nimroz where the Taliban had strong influence even before the surge in recent weeks, Hosseini said.

“I think the new Iranian government will greatly expand its cooperation with the Taliban government. Iran can easily double its trade with Afghanistan. (Ashraf) Ghani’s government has always tried to limit cooperation with Iran since Iran was under US sanctions, ”Hosseini said.

Afghanistan has not developed its own oil industry. The country has six mini-refineries, each of which produces only several thousand barrels per day of refined products.

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

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

The directly-informed source said the supply of Turkmenistan condensate (light crude oil) ceased a month ago due to the security situation, but predicted it would resume in about two weeks.

“The problem is, the banks stopped working three days ago, so we could go back to bags of money,” the source said.

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