Iran Renewing Crude Export Deals for 2016

Iran Renewing Crude Export Deals for 2016Iran Renewing Crude Export Deals for 2016

Iran has renewed crude export contracts for 2016 with some of its oil customers, the National Iranian Oil Company's director for international affairs said in a statement on Monday.

"Some of the oil export contracts have been renewed, although the deals with many traditional oil buyers will be extended [when they expire] in April," Seyyed Mohsen Qamsari was quoted as saying by Mehr News Agency.

The official did not name the companies or countries involved in negotiations. Japan, China, India, South Korea and Turkey are traditional clients of Iranian crude.

Qamsari added that negotiations have been made with new customers of Iran's oil, but the finalization of deals depends on sanctions removal, which is expected to take place in mid-January.

The Persian Gulf country is keen on regaining the market share it lost to rival producers such as Iraq and Saudi Arabia, the biggest producer of the Organization of Petroleum Exporting Countries.

It is planning to boost production by 500,000 barrels per day within a week of the lifting of sanctions and by 1 million bpd within the following six months, and is largely counting on its pre-sanctions clients to sell additional oil output.

Last month, Iran extended crude contracts with its top two Chinese buyers into 2016.

Sinopec Corp, Asia's largest refiner, and Chinese state trader Zhuhai Zhenrong Corp will together lift around 505,000 barrels per day of crude from Iran in 2016, the same as 2015. The duo reportedly took about half of Iran's total oil exports last year. Iran was China's sixth biggest crude supplier in 2015.

The prospect of additional Iranian crude has roiled the oil market, but Tehran has made it clear that it will not back out as long as other producers keep pumping for market share in the oversupplied market. Iran pumped 2.7 million barrels a day of oil in December, data compiled by Bloomberg show.

Saudi Arabia, the world’s largest crude exporter, has led OPEC in fighting for market share against higher-cost producers such as shale drillers in the US. The group set aside its output target of 30 million barrels a day at a meeting in Vienna last month.

Oil Minister Bijan Namdar Zanganeh has blamed other OPEC members for low crude prices. In a statement last week, he proclaimed that Iran is not planning to harm the oil market with its planned increase in production.