London, 14 July (Argus) — BP has stopped all supplies of aviation fuel to state-owned Iran Air after an existing contract wound down at the end of last month, while Shell will not renew any contract with Iran-based airlines in a seemingly twin decision with its rival.
It follows the latest round of US sanctions, which are primarily focused on gasoline exports to Iran, although the bill's effect has now snowballed to impact the sale of other oil products. BP and Shell do not sell gasoline to Iran although they still buy Iranian crude, which does not come under sanctions.
BP will now have no role in the refuelling of Iranian aircraft at airports across Iran, Europe, the Middle East and the handful of destinations Iranian jets still fly to in Asia-Pacific. It is yet unconfirmed whether Shell has already wound up its contract with Iranian airlines ahead of Iran Air's next supply tender, which starts in October. BP and Shell will not participate in the tender, which covers jet refuelling operations across all international airports — mainly Europe and the Middle East — where Iran Air flies to. The quantities are not known.
The decision by BP and Shell affects not only Iran Air, but smaller, mostly semi-private-sector Iranian airlines that have sprung up in recent years, offering an alternative link between the capital Tehran and Dubai.
BP said last week that it “fully” complies with any international sanctions in all the countries where it operates but refused to discuss details of its individual contracts with airlines. Shell refused to discuss details of jet volumes it had sold to Iran in the past.
Total — a major jet fuel supplier to international airlines and previously involved in the supply of gasoline to Iran — was not immediately available for comment on whether it will continue supplying jet fuel to Iranian aircraft in the coming weeks and months.
Iran Air is adamant that the decision by BP and Shell to pull out will not affect the normal running of its flights and the refuelling of its aircraft outside Iran. The airline's UK manager, Darioush Niknam, told Argus today that the company has “no concern” and has encountered no difficulty in the refuelling of its aircraft at London's Heathrow airport.
Iran Air has scaled down the frequency of its flights to the UK to once a week, according to the airline's summer schedules. Following the approval of new EU safety restrictions on Iran Air's ageing fleet, the airline now flies Airbus A300-600s to London instead of the pre-1979 Boeing 747s.
NIOPDC, an affiliate of Iran's state-owned NIOC that is in charge of the distribution of oil products, supplies Iran Air with jet fuel inside the country although it is unclear whether the company handles jet purchases for the airline outside Iran as well. Officials at NIOPDC were unavailable for comment because of an unscheduled public holiday in the country.
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