• 4 minutes Your idea of oil/gas prices next ten years
  • 7 minutes WTI Heading for $60
  • 13 minutes Could EVs Become Cheaper than ICE Cars by 2023?
  • 1 day Pence says South China Sea Doesn't Belong To Any One Nation
  • 2 days Anyone holding Nvidia stock?
  • 5 hours Is California becoming a National Security Risk to the U.S.?
  • 19 hours Why does US never need to have an oil production cut?
  • 2 days Germany Discusses Lifting Ban on Deporting Syrians
  • 2 hours US continues imports of Russian gas which it insists Europe should stop buying
  • 2 days UK Power and loss of power stations
  • 2 hours Pros and Cons of Coal
  • 6 hours Trump administration slaps sanctions on Saudis over Khashoggi's death
  • 2 days China Claims To Have Successfully Developed a Quantum Radar That Can Detect 'Invisible' Fighter Jets
  • 2 days I Believe I Can Fly: Proposed U.S. Space Force Budget Could Be Less Than $5 Billion
  • 2 days A Sane Take on Nord Stream 2
  • 22 hours Commission: U.S. Could Lose Wars With Russia, China
The Biggest Threat To Dollar Dominance

The Biggest Threat To Dollar Dominance

Russia’s large oil companies are…

Iran Denies Reports It Plans To Resume Oil Sales With Steep Discounts

Iran is dismissing a report that it plans to offer steep discounts on oil to many customers, particularly in Asia, when it returns to the global energy market sometime in 2016.

In an interview with Iran’s Islamic Republic News Agency (IRNA) on Sunday, Oil Minister Bijan Namdar Zangeneh said Iran plans to offer only what the agency described as “regular and customary” discounts that often are available to any potential customer.

Zangeneh was responding to a report by Reuters, based on anonymous sources in India, that Iran’s agents had changed its tactics in talks with prospective buyers. Rather than quoting their country’s own terms and prices for oil sales, they were asking potential buyers for suggestions about how Iran’s oil might be more competitive with that of its rivals.

Related: China's $1 Trillion Nuclear Plan

Iran’s standard offer for customers in India, the world's second-largest consumer of Iranian oil, is 90 days’ credit, free shipping and modest discounts on the oil itself.

“I haven’t seen [Iranian oil negotiators] as flexible as they were in the recent meeting,” said a source who works at an Indian refinery who met last week with S.M. Ghamsari, the international affairs director of the National Iranian Oil Co., according to the Reuters article.

”They have sought our feedback on how to make pricing of their crude competitive.”

The story also quoted four other sources at an Indian refinery as saying Ghamsari seem prepared to consider lower prices than usual, as well as offer new grades of crude oil, in an effort to boost Iran’s market share. “Naturally we will see if Iranian oil fits into our model,” Reuters quoted one source at an Indian refinery that doesn’t already buy Iranian oil. “If it is economical, only then we will go for it.”

Related: OPEC: $95 Oil, But Not Until 2040

None of this is true, however, Zangeneh insisted. Certainly, he said, Iran is eager to recover the market share it lost with the imposition of Western sanctions over its nuclear program, but not through cutthroat discounts.

“Iran’s oil exports will double if we increase the country’s production capacity by 1 million barrels,” Zangeneh said. “The sharp decline in oil prices will mostly harm countries which have collected Iran’s share in the market. … We need to regain our share in the market in order to avoid the need to ask OPEC countries to make room for Iran.”

Actually, for months Iran has been urging the cartel to cut production to do just that in order to prevent a further drop in oil prices, which have been on a steep decline since June 2014. But OPEC has steadfastly maintained and even exceeded its self-imposed output ceiling of 30 million barrels per day, and at its ministerial meeting on Dec. 4 dispensed with that ceiling altogether.

Related: Are Solar Panels Lifespans As Long As Industry Claims?

In July, Iran agreed to greatly limit its nuclear research in exchange for a lifting of sanctions after months of negotiations with Britain, China, France, Russia and the United States – the five permanent members of the United Nations Security Council – as well as Germany.

Yukiya Amano, the director general of the U.N.’s nuclear overseer, the International Atomic Energy Agency, said the organization should be able to very that Iran has complied with the terms of the agreement as early as the end of January 2016.

In his interview Sunday with IRNA, Zangeneh repeated Iran’s long-held belief that it could ramp up oil production by 500,000 barrels per day virtually as soon as the sanctions are lifted, and could double that increase “after a short while.”

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • DemocracyRules on December 29 2015 said:
    Andy Tully:
    Thanks for this article update. Perhaps another would help too. Questions unanswered include:

    - Multiple sources say that there is no agreement with Iran. Nothing was formally signed, and the pdf file of the White House version of the July 14 agreement is very loosely worded. It's not clear if Iran has actually agreed to anything in writing.

    - Iran has repeated many times since July 14 that they will not comply with the agreement. They have given many reasons for this. The worst sticking point is their demand that all sanctions must be lifted before they implement any part of the agreement.

    - Iran has now admitted to having worked on nuclear weapons for years. They have provided very little detail, and they will not agree to cease doing this work. One obvious problem is the their ongoing R&D work on making triggers for plutonium bombs.

    - Unless Iran stops all work on nuclear weapons, it would appear that some forms of sanctions, embargoes, and/or blockades from other countries will continue. For example, if Iran does get approval to export more petroleum, will the Saudis react by ramping up production to make oil even cheaper?

    It would be very valuable know anything you have about these and other related questions.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News