NIOC Says No Plan to Cut Oil Price

NIOC Says No Plan to Cut Oil Price
NIOC Says No Plan to Cut Oil Price

Iran has no plans to further reduce its oil export prices, director of international affairs at the National Iranian Oil Company (NIOC) said, Mehr news agency reported Saturday.

Mohsen Ghamsari ruled out a further cut in Iranian crude prices in global markets and asserted that the NIOC has not changed oil prices. Iran adjusts its pricing formula for oil on a monthly basis and the government has no plans to adopt a new formula every week, he noted.

"Crude prices have become rather unpredictable and it is difficult even to predict the minimum price," said Ghamsari on the consecutive decline in prices.

Supply and demand is no longer the decisive factor in global oil prices, and Iran's crude prices are "entangled with political issues," Ghamsari said without elaboration.

NIOC regulated its pricing formula and reduced crude prices in early October in the wake of Saudi Arabia's decision to lower its crude prices by 1 dollar per barrel.

Having 16 percent of the world's proved oil reserves, the kingdom is the largest exporter of petroleum liquids in the world, and maintains the world's largest crude production capacity. It is also the second-largest petroleum exporter to the United States, after Canada. Iran wants to regulate its pricing formula according to the global market. Ghamsari stressed that the country's price regulation is not aimed at competing with Saudi Arabia or other members of OPEC.

In September, the Saudis boosted production half a percent, to 9.6 million barrels a day, lifting OPEC’s combined production to an 11-month high of almost 31 million barrels a day. Then, on Oct. 1, Saudi Arabia lowered prices by increasing the discount it offered its major Asian customers.

Brent crude fell from $115.71 a barrel on June 19 to $82.60 a barrel on Oct. 16, the lowest price in almost four years.

The OPEC heavyweight exported 6.663 million barrels per day (bpd) in August, down from 6.989 million bpd in July, according to data from the Joint Organizations Data Initiative (JODI).