Plans for Large Oil Discounts Denied

Plans for Large Oil Discounts DeniedPlans for Large Oil Discounts Denied

Iran's oil discount in post-sanctions era will be based on market norms, Oil Minister Bijan Namdar Zanganeh said late Sunday.

Dismissing all foreign press speculations about giving "substantial discounts" to potential customers to regain the lost market share, Zanganeh added that Iran would never undersell its oil, IRNA reported.

According to a report in Economic Times, Iran has agreed to consider Indian demands for oil price discounts and other buying incentives, as it works to rebuild market share in a world awash with crude. Nonetheless, NIOC officials, including its chief and deputy oil minister, Rokneddin Javadi, have already denied such unfounded claims circulated byforeign media with vested interests.

According to Zanganeh, raising oil export to pre-sanctions level tops NIOC's operational agenda. Sanctions curbed Iran’s sales of crude and condensate to 1.4 million barrels a day in 2014 from 2.6 million in 2011, according to the US Energy Information Administration.

Underscoring the fact that 500,000 barrels will be added to Iran's output immediately after sanctions removal, the official added, "Plans have been made to supply the global market with 2 million bpd by the end of the current Iranian year (March 19, 2016)."

"We will return to the international market without a slightest delay," he said.

"We believe that our lost market share should be regained so that we do not have to bow to some OPEC members to accommodate our return to previous export levels and to make room for our increased crude production."

Iran was OPEC’s second-largest producer before sanctions over its nuclear program were tightened in 2012. The nation, which reached a landmark nuclear deal with six world powers in July, is currently the group’s fifth-largest supplier, pumping 2.7 million barrels a day, according to data compiled by Bloomberg last month.

During the years when Iran's presence faded away, producers such as Saudi Arabia, Russia and Iraq captured the oil market. Nevertheless, as the sanctions removal day approaches, the oil minister has already sent letters to oil producing companies and exporting terminals issuing an order to be ready for a jump not only in output but also in export.

In a record-setting operation in the National Iranian South Oilfields Company a few days ago, oil production increased by 500,000 barrels in less than a day. NISOC is producing about 83% of all crude oil in Iran.

Furthermore, the strategic project of overhauling underground pipelines at Kharg Oil Terminal in the Persian Gulf has been completed and Iran's largest oil terminal is fully geared to boost oil export by the 500,000-bpd milestone.