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Iran looks set to halt exports of fuel oil to Asian markets during the first three months of 2009 as it focuses on meeting domestic demand for power generation during the winter season, Reuters reports.

The National Iranian Oil Company (NIOC), which typically exports between three and four cargoes of fuel oil per month between January and March is reportedly planning to offer spot cargoes only if domestic demand weakens.

According to Reuters, a source familiar with the country's fuel export programme said Iran will not be able to offer spot cargoes because it will need to manage its own requirements for power generation during the winter period.

"We will continue to meet our agreements on our term contracts, and will only consider spot sales if the winter is not severe and the requirement for domestic power generation is less," the source is reported to have said.

Over the previous two winters, Iran has reduced exports of fuel oil due to an increase in domestic consumption. This resulted in exports to the Middle East's major bunkering port, Fujairah, being slashed by up to 60 percent.

Another reduction in fuel oil shipments over the coming months is also likely to have similar consequences for the Middle East bunkering market and push up premiums.

Fujairah is one of the leading bunker ports in the world with estimated volumes of between 13 and 15 million tonnes per year.

Meanwhile, Saudi Arabian refiner Saudi Aramco is also said to be planning not to sell any spot fuel oil during the first quarter of 2009, in order to meet rising requirements from domestic utilities.

Aramco typically exports one or two 80,000 tonne fuel oil cargoes per month. It usually offers a 380-centistoke cargo from its refinery in Jubail and/or a 180-centistoke parcel from its Ras Tanura oil processing facility.