NIOC Responds to Reports on Declining Oil Prices

NIOC Responds to Reports on Declining Oil Prices
NIOC Responds to Reports on Declining Oil Prices

Seyyed Mohsen Ghamsari director of international affairs and member of National Iranian Oil Company (NIOC)'s board of directors denied allegations that Iran has reduced oil prices to attract Asian customers, while affirming that the price of Iranian crude decreased in proportion with Saudi oil prices.

Noting that Iran and Saudi oil prices were always parallel and competitive, Ghamsari said: "Iranian oil prices have not decreased significantly in competition with Saudi Arabia only to attract customers, to meaningful degree," Shana reported.

On whether Iran will reduce prices in the same manner as Saudi Arabia did for its Asian buyers, Ghamsari said that oil prices are announced monthly, in accordance with market conditions.

"Iran's oil price will also decrease in line with Saudi oil prices, because of technical reasons," he said referring to economic conditions, the supply and demand mechanism, and the price of [petroleum] products in the market as technical factors.

"The reduction of Iranian oil prices does not denote that Iran wants to have a meaningful competition with Saudi Arabia."

Saudi Arabia, the world’s largest oil exporter, reduced the price of Arab Light crude for Asia to the lowest since December 2008. State-owned Saudi Arabian Oil Co. on October 1 cut prices for all grades and to all regions for November.

The Asian price of Arab Light was cut by $1 a barrel to a discount of $1.05 to the average of Oman and Dubai crudes.

A Bloomberg report published on Friday suggested that NIOC will sell Iranian Light, the country’s main export grade, to buyers in Asia next month at a discount of 82 cents a barrel to the average of Oman and Dubai. Saudi Arabia cut its oil prices to boost margins for Asian refiners who couldn’t process the crude profitably, not to start a price war, the report said.

That’s $1 lower than the October price and the biggest discount since December 2008, matching cuts by Saudi Arabia as global crude benchmarks slide deeper into a bear market, according to the Bloomberg report.

According to the most recent OPEC Monthly Oil Market Report, Iran's heavy crude oil was priced at $96.14 per barrel in September, which indicates a $5.28 decrease compared with August. The average price of Iran's heavy oil in the first nine months of the current year was $103.86 per barrel.

Saudi light oil was priced at $97.23 per barrel in September.