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No discounts for oil, Iran says

Tehran trying to win back market share, but says crude oil based on market prices.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Feb. 15, 2016 at 9:13 AM
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TEHRAN, Feb. 15 (UPI) -- Iran is not marking its return to the global crude oil market in the post-sanctions era with price discounts, a director at the state-run oil company said.

Iran this weekend shipped 4 million barrels of crude oil to Europe as part of a deal with French energy company Total and others. Mohsen Qamsari, a director of international affairs at the National Iranian Oil Company, told the Oil Ministry's news website SHANA the oil was sold according to market conditions.

"Iran prices its crude oil supplies based on official prices in its new deals and it does not offer discounts to its customers," he said Monday.

The basket of crude oil blends sold by members of the Organization of Petroleum Exporting Countries was $26.74 per barrel as of Friday. Brent, the global benchmark for crude oil, closed Friday at $33.36 per barrel.

Iran said it was countering reports that said it was selling its oil at a discount to win a market share back from rival Saudi Arabia, which SHANA reported was offering "tantalizing discounts" to its customers to ensure its dominance in the global crude oil market.

Hossein Jabari-Ansari, a spokesman for the Iranian Foreign Ministry, added it was Iran that would win back its share as sanctions pressures ease in response to last year's multilateral nuclear agreement.

"Retaking Iran's oil quota is a path that will be taken," he said. "Hence, ministries of foreign affairs and petroleum will make the necessary cooperation to materialize the objective."

Iran said it would add up to 500,000 barrels of new oil per day to a market already flush with supplies, with deals with Italian energy companies expected in a matter of days.

Crude oil prices are down about 70 percent from mid-2014, leaving the economies of major producers from Saudi Arabia to Russia feeling the pressure. Moody's Investor's Service said the Iranian economy is more diverse than other oil exporters in the region. Working under the pressure of Western economic sanctions meant Iran had to retool its economy and adapt to lower oil revenues before crude oil prices started their swift decline from $100 per barrel.

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