(Bloomberg) -- Iraq halted contracts to import diesel after the upgrade of some refineries helped bolster local output, putting the country on track for fuel self sufficiency. 

The country wound down purchase deals at the end of last year and hasn’t bought the fuel under long-term contracts so far in 2024, according to traders involved in the market. It has bought three diesel cargoes this year, according to market data provider Vortexa, but traders said those were spot shipments.

Iraq, however, is still buying gasoline under term deals, according to the traders who asked not to be identified because the information isn’t public. It’s targeting eliminating imports of the motor fuel as early as this year. The country is refurbishing refineries that were damaged during two decades of war, with the Al-Shamal plant restarting in 2024, and others to follow, Hamid Younis, deputy oil minister for refining affairs, said in February.

A spokesman for the oil ministry couldn’t immediately be reached for comment outside normal business hours. 

Iraq imported 2.83 million barrels of diesel last year, or about 7,800 barrels a day, according to Vortexa. It also tendered to buy about 55,000 barrels a day of gasoline on average through the end of this year, according to traders. That’s up from about 43,000 barrels of seaborne gasoline supplied daily on average last year, according to Vortexa. 

Baghdad is buying gasoline from trading units of Saudi Aramco, Reliance Industries Ltd. and Oman’s state energy company OQ, among others, according to traders and data from ship tracking firm Vortexa. Those companies are supplying under long-term contracts that Iraq continued this year, the traders said.

The country has a designed refining capacity is 1.26 million barrels a day, though actual processing is lower. 

Iraq is the second-largest crude oil producer in the Organization of Petroleum Exporting Countries, behind Saudi Arabia. Iraq’s oil output has been in focus in recent months as the country struggles to meet a limit pledged to the OPEC+ group that includes allied countries like Russia. The amount of crude the country actually refines along with its exports are some of the main factors used to assess Iraq’s production.

--With assistance from Khalid Al-Ansary and Rakesh Sharma.

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