News ID: 136804
Published: 0328 GMT February 15, 2016

Iran denies reports on crude discount

Iran denies reports on crude discount

A senior National Iranian Oil Company (NIOC) official has denied recent reports that Iran is considering a discount for foreign customers of its crude oil, noting that the Iranian crude is only sold at the official market price.

According to Shana, the company's Deputy Managing Director for International Affairs Mohsen Qamsari dismissed as false recent foreign media reports claiming that the country is selling crude oil below the official price in order to undercut Saudi Arabia.

Qamsari noted that reports about "Iran considering discount for customers" of its crude oil are not correct, adding, "Iran's oil is priced along the lines of the official price on the market."

On February 11, Reuters released a report claiming that Iran has cut its heavy crude price for export to the Mediterranean by a larger extent compared with Saudi Arabia in a bid to attract more buyers after sanctions imposed on the country were lifted.

The report referred to sanctions, which were imposed on the Islamic Republic by the United Nations Security Council as well as unilateral sanctions, which had been imposed by the European Union and the United States since 2010.

Iran reached an agreement with the five permanent members of the Security Council plus Germany last July based on which the sextet agreed to remove sanctions on Iran's economic and energy sectors in return for Iran restricting its nuclear activities.

The agreement, known as the Joint Comprehensive Plan of Action (JCPOA), went into force on January 16, 2016.

In another part of its report, Reuters claimed that the March official selling price (OSP) for Iranian heavy crude to the Mediterranean was set at $6.40 a barrel below the Brent Weighted Average (BWAVE), down 35 cents from the previous month.

In Northwest Europe and South Africa, Iranian heavy oil's March OSP was set at $6.3 a barrel below BWAVE, up 25 cents from a month ago, against a discount of $6 for Arab Medium in the same region, the report added.

Rejecting the report, Qamsari said in all new contracts signed by Iran for selling oil, the price of the country's crude is set on the basis of the official rate that is in effect at the time of signing the contract and Tehran has no plan to consider any discount for foreign customers.

The rumors came after Iran announced it has started exporting crude oil to European countries following the removal of sanctions.

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