Kenya to import oil from Iran

Last Updated 14 years ago by Kenya Engineer

Kenya has signed a memorandum of understanding with Iran on oil. The country will now be importing 4 million tonnes of Iranian crude oil per year.

This however opens the country to the risk of breaching US and European sanctions. Most of the other importers of Iranian crude oil have sharply reduced purchases to earn exemptions from the US financial sanctions. The European sanction like the ban on imports of Iranian oil by EA states make it difficult for other countries to trade with Iran. The sanctions are meant to reduce oil and other revenues used by Iran to further its nuclear program.

Under the proposed contract, Tehran could give an extended credit facility of 90 days, saving the country millions of shillings currently used to import expensive crude oil through overdraft facilities. Iranian crude oils are also considered to have sulphur content and are hence cheaper.

This comes at a time when Kenya’s only refinery, Kenya Petroleum Refinery (KPR) is planning to shift to a merchant refinery. The refinery which processes 1.6 million tonnes of oil a year will start importing and processing its own crude oil then sell it to other marketers. The permanent secretary, Patrick Nyoike said the crude oil would total about 30 million barrels over one year equivalent to around 80,000 barrels per day.

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