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Iran turns to Singapore for gas oil


Press TV - Iran has reportedly bought three million barrels of gas oil from a Singapore trader to compensate for a loss of supplies from India.

Hin Leong already supplied Iran with one million barrels of gas oil (diesel) in December, with another cargo of the same size due to be sent later in January, the Reuters news agency quoted an unnamed trader as saying.

Industry sources had said this week that the deal was for January to March, Reuters reported.

Iran signed a deal with India's MPRL in May to export 240,000 tons of gas oil up to December. The volume of the deal was doubled in August. Iran lacks adequate refining capacity to meet domestic demand.

However, the two sides have failed to resolve a price dispute. MPRL has confirmed that it was not slated to ship any cargoes to Iran in January, which might have prompted Tehran to turn to the Singapore trader.

"It really makes sense. They're buying 0.5 percent (sulfur gas oil) and Iran takes 0.5 percent," said a Singapore-based trader.

According to FACTS Global Energy, Iran will need an average of nearly 70,000 barrels of gas oil per day from 2008 to 2010 to help meet power generation needs during the colder months of the year.

Meanwhile, the Business Standard newspaper reported on Wednesday that under US pressure India's Reliance Industries Ltd has decided to stop gasoline supplies to Iran.

The decision came after eight US congressmen wrote to the US Export-Import Bank to suspend all financial assistance to the Indian company until it agreed to halt sales to Iran, the paper said, without citing any sources.

Reliance, India's biggest private refiner, also halted gasoline and diesel exports to Iran in the last quarter of 2007 after French banks BNP Paribas and Calyon stopped offering credit on the deals.

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