NIOC Rejects Reports on Underselling Crude

NIOC Rejects Reports on Underselling CrudeNIOC Rejects Reports on Underselling Crude

National Iranian Oil Company categorically rejected the notion that Iran is underselling its crude oil, amid reports that the Islamic Republic is offering oil discounts to squeeze rival producers.

"Discount to our oil customers is not true and our prices are on a par with the global market," Seyyed Mohsen Qamsari, director for international affairs at NIOC, was quoted as saying by ISNA on Monday.

Reports circulated last week that Iran has adopted an aggressive pricing strategy by giving a $1.25 per barrel discount on its oil bound for Europe compared to Saudi Arabia’s similar blend.

"Iran's oil prices under the new contracts are according to official prices," Qamsari added without giving details.

Global benchmark Brent traded at around $33 a barrel on Monday after picking up 11% on Friday, its biggest rally since December 2008.

Qamsari also said the state-run NIOC is engaged in active negotiations with "many companies", including from Hungary, to ramp up crude exports.

The second-biggest producer of the Organization of Petroleum Exporting Countries in 2011 and now its fifth-biggest, Iran has vowed to win back market share from rival suppliers such as Saudi Arabia and Iraq who have kept pumping at record-highs over the past several months. Iran's return is weighing on the oversupplied market, but the country's Oil Minister Bijan Namdar Zanganeh has insisted that other OPEC producers should cut output to make room for additional Iranian crude.

The country pumped 2.8 million barrels a day on average last year. Under international sanctions, Iran was allowed some sales to buyers, including China, India, Japan, South Korea and Turkey.

The Persian Gulf country has vowed to boost crude production capacity by 1 million barrels a day this year after international sanctions against it were lifted last month. Iran has announced signing deals to export 300,000 bpd to European clients.

The first shipment to Europe was made last week, as three international vessels loaded 4 million barrels of oil destined for Spain, France and Russia from Iran's southern terminals.

Qamsari said shipments have begun to France's Total as well as Russian and Spanish refiners, Lukoil and Cepsa, respectively.

NIOC Managing Director Rokneddin Javadi said on Sunday Iran's oil production capacity has increased by 400,000 bpd after the Jan. 16 removal of sanctions. He added that it is within reach to boost output by 200,000 more barrels a day in the near future.