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Dubai's ENOC loses deal to fuel U.S. military jets

DUBAI (Reuters) - The U.S. military has not renewed its contract to buy jet fuel from Emirates National Oil Company (ENOC) in the United Arab Emirates (UAE) because other suppliers made cheaper bids, the U.S. Department of Defense said.

Dubai government-owned ENOC was contracted by the U.S. military to supply jet fuel to Al Minhad Air Base near Dubai from mid-2011 to the start of September 2013.

ENOC, which makes fuel from Iranian oil at a refinery near Dubai, has not been awarded any U.S. military contract renewals in the UAE. Chevron won the new contract to supply U.S. allied military jets refueling in Dubai.

"ENOC was not awarded a contract because ENOC was not the lowest price offerer," a spokesman for the U.S. Department of Defense said in an e-mail when asked if the deal was not renewed because of ENOC's ongoing use of Iranian oil.

Chevron, whose UAE offices are housed within the ENOC complex in Dubai, declined to comment on commercial agreements or its relationship with ENOC.

The United States has urged other users of Iranian oil to slash their imports over the last two years as Washington tries to starve Tehran of funds for its disputed nuclear activities.

U.S. officials have asked ENOC to reduce its imports of light Iranian oil, but close U.S. ally Dubai is still importing large quantities, according to shipping data, because its refinery is designed to run on it.

ENOC loses hundreds of millions of dollars a year because it is obliged by UAE rules to sell gasoline at a fraction of international market rates.

Plentiful supplies of cheap Iranian oil available a short voyage across the Gulf help offset the loss.

The Al Minhad airbase near Dubai is a hub for U.S.-allied forces in the Middle East.

(Reporting by Daniel Fineren; editing by Jason Neely)

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