0123 GMT November 28, 2020
With the intensification of competition among oil exporters for raising output share in international markets by offering discounts, Iran has also adopted the same strategy to prevent Saudi Arabia from dominating and monopolizing the market, IRNA reported.
Saudi Arabia was the first country which initiated offering steep discounts to customers which was followed by other producers in an effort not lose market.
Given the likeness of Saudi Arabia's heavy crude with that of Iran, the competition between the two long-time rivals is even more severe, inflicting heavy losses on the losing side.
Therefore, Iranian oil officials reduce oil price in proportion to the amount of the discount Saudi Arabia offers.
Mohsen Qamsari, a director of the National Iranian Oil Company, said, "There is a stiff competition among Asian oil producers to get a greater share of the market. Iran also intends to cut its oil price."
He added Riyadh sells oil in five markets in four of which it has increased the price and only in one, the country sells crude at lower prices.
Qamsari noted Saudi Arabia has only lowered the price differential.
He said, "Saudi Arabia does not plan to harm Iran. At present, the competition is highly stiff in Asia's oil market. Countries including the US, Venezuela and even Russia are also exporting crude to the market. It appears quite reasonable that Riyadh decrease the oil price to maintain its market share."
Iran's total in-place oil reserves have been estimated at more than 560 billion barrels with about 140 billion barrels of extractable oil. Heavy and extra heavy varieties of crude oil account for roughly 70-100 billion barrels of the total reserves.
The country holds the world's third largest proven oil reserves and the second-largest natural gas reserves.