* LUKOIL discharged 250,000 bbl gasoline in Iran last week
* LUKOIL set to move another parcel of gasoline to Iran
By Luke Pachymuthu and Vladimir Soldatkin
SINGAPORE/MOSCOW, Aug 11 Russian oil giant
LUKOIL (LKOH.MM) has resumed gasoline sales into Iran in
partnership with China's state-run firm Zhuhai Zhenrong, even as
the United States urges the international community to be tough
Iran is the world's fifth-largest oil exporter but lacks
adequate refining capacity to meet domestic demand for motor
fuel, forcing it to import up to 40 percent of its requirements.
Russia and China, both permanent members of the U.N.
Security Council, signed up to the latest round of U.N.
sanctions on Iran, but refused to support measures that targeted
the Islamic Republic's oil and gas sector.
The U.S. has since passed additional unilateral sanctions
allowing it to penalise fuel suppliers to Iran, measures
criticised by both Beijing and Moscow.
Moscow is struggling to balance trade ties with Tehran and
warmer relations with the United States, which is eager for
Kremlin support to rein in Iranian nuclear activities Washington
says it believes are aimed at developing a nuclear bomb.
In July, Russia's energy minister Sergei Shmatko said
Russian companies would be ready to supply fuel to Iran if there
were commercial interest and attractive terms. [ID:nLDE66DORE]
LUKOIL has the largest U.S. presence among Russian firms. In
April, it joined a growing list of companies that halted
shipments as sanctions loomed.
Then sources familiar with the company said traders involved
in gasoline trading with Iran at the Russian energy giant had
received verbal direction from senior management to halt
But LUKOIL's trading arm, Litasco, and Zhenrong discharged a
250,000-barrel gasoline cargo at the Iranian port of Bandar
Abbas last week, industry sources said.
Geneva-based Litasco was expected to ship a second cargo of
the motor fuel to Bandar Abbas later this week, traders said.
A LUKOIL spokesman said "one-off deliveries (to Iran after
it decided to stop the shipments in spring) took place within
the frame of previously signed contracts."
The spokesman declined to give more details. It was unclear
if either of these shipments to Bandar Abbas formed part of the
previously signed contracts.
Chinese companies have delivered about half of Iran's
gasoline imports in recent months. State-run Zhenrong is the
single largest lifter of Iranian crude oil.
EXPOSURE TO THE US
LUKOIL has significant exposure in the United States, with
1,500 retail gasoline stations. U.S. major ConocoPhillips
(COP.N) owns 20 percent of LUKOIL's share, but in July announced
its plans to sell the entire stake and use the funds to buy back
The Russian firm recently said it would buy back 40 percent
of Conoco's 20 percent stake in the company with an option to
buy back the remaining 11.61 percent.
The European Union also passed sanctions that target oil and
gas investment in Iran.
With increasing pressure from the United States and its
Western allies, many international oil companies and trading
firms have been forced to halt their supply to Iran, fearing a
"No company wants to be blacklisted by the United States or
for that matter, the European Union, so most companies have just
decided to let it go," a trader said.
Since the start of the year international oil companies such
as Royal Dutch Shell (RDSa.L), France's Total along with
Reliance Industries (RELI.BO), the world's largest private
refiner, have stopped supplying Iran with gasoline. Others that
have stopped supply include Swiss based traders Glencore
[GLEN.UL] and Vitol [VITOLV.UL].
"It is certainly getting harder for Iran to buy gasoline
from the international spot market...sellers are mindful of the
tougher sanctions environment," an Asian-based trader said.
"Sellers are well aware of the risks involved in continuing with
this business, but they will have to weigh it against the
(Additional reporting by Amena Bakr in Dubai)
(Reporting by Luke Pachymuthu and Vladimir Soldatkin)