Tuesday, October 22, 2013

Iran Could Offer Price Discounts to Regain Oil Markets

Iran could offer crude price discounts in the future to regain its former markets, a senior Iranian oil official said today, quoted by oil ministry news service Shana.

“Basically, Iran doesn't have any obligation to give discounts for selling crude oil because our existing oil customers at the moment can make their purchases in accordance with international laws without any worry,” Mohsen Ghamsari, NIOC's international affairs director, said.
”But as the oil minister has announced before, if the international circumstances become normal, in order to gain back our traditional markets, if necessary, one of Iran's leverages in this regard is price, considering the... situation [at the time],” he added.
(SHANA/Platts, 22 October)

The sanctions, in particular those imposed separately by the U.S. and EU in late June and early July last year, have slashed Iran's crude exports to around 1 million b/d from pre-sanctions levels of 2.3 million b/d.

Ghamsari, who is in charge of Iran's crude trade, also said oil supply in the market currently exceeded demand.

”Considering the global recession, the relation between demand and supply is not in a good condition, and I think, based on global factors, the oil price should naturally decrease, but because of brokers in the market, the stock market prices are not falling,” he said.

”Another reason for the oil price not falling, despite high supply in the market, is the high cost of production from some oil fields in the hands of big world powers because they want to keep production in these fields profitable,” he added.

Ghamsari said Iran's eventual recovery of its market share would push prices down.

”It is natural that after Iran's oil moves into the global markets again, under the current conditions, a decrease in the oil price can be seen. At the moment, based on the existing statistics, oil demand is 30% lower than the normal status,” Ghamsari said. “Obviously, all oil sellers want oil price to go up, but if we think realistically high oil prices will not benefit the producers much in the long run,” he added. (SHANA/Platts, 22 October)

North Sea Brent crude futures traded at $110.09/barrel today.

File photo: Iran's crude oil export terminal at Kharq Islands. (Getty Images)


Anonymous said...

a partial admission that Iran's economy is in serious trouble.... and how badly Iran needs to make a deal

Anonymous said...

Islamic regime has made Iran bend over. For those who know the Parsi meaning of that knows what I mean.

B.M.A said...

shame on you!!

Anonymous said...

No,shame on you !