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Iran has offered its assistance to Europe in the form of oil and gas deliveries for the winter, per a statement by Iranian Oil Minister Javad Oji.
According to a report in Iran Front News, the minister noted that energy prices were out of control, pointing to Germany as an example and saying businesses there might have to shut down because of excessive energy costs.
The official said Iran could help relieve the price pressure by exporting more gas to Europe but pointed out that the Europeans had done this to themselves. He also predicted that oil and gas buyers would face a difficult winter this year.
In the meantime, Iran will be exporting more oil and gas condensate to buyers in Latin America and Asia, as well as parts of Europe, Oji also said.
Iran has been expanding its oil exports despite U.S. sanctions this year, with the bulk of shipments going to China. In recent months, Russian crude has become a major competitor because, like Iranian crude, it sells at a discount. According to analysts, the Iranians simply cut their prices further to stay competitive.
"Iranian crude was facing strong competition from Russian Urals in July as the non-sanctioned barrels were offered at similar discount levels. However, as the price difference of the two widened, Chinese refiners may turn back to cheaper Iranian barrels in August," a Vortexa analyst said earlier this month, as quoted by Tehran Times.
The European Union has been trying to broker a deal between the United States and Iran on the latter's nuclear future for more than a year now and recently submitted its final proposal to the two sides.
According to a recent statement by a U.S. official, Iran had dropped another of its demands, which suggests a deal might be in sight. Yet the report comes on the heels of another, in which Iran accused the U.S. of procrastinating, so nothing is certain yet.
The return of Iran to the international oil markets would go a long way towards offsetting the effects of the upcoming European Union embargo on Russian crude, which is set to take effect later this year.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.