Publishe Date: 1:10 PM - 12/27/2015 | Print

Iran rules out steep oil price discount

Economy - Minister of Petroleum Bijan Zangeneh has dismissed reports of steep oil price discounts which Iran might be ready to give when the country ramps up production with the lifting of sanctions in 2016.

“After the removal of sanctions, we will give any discount according to common rates of the oil market,” the IRNA news agency quoted him as saying.

The remarks came after reports that Iran had agreed to consider its oil clients’ demands for extraordinary price discounts and other buying incentives when it jacked up production.

Iran is preparing to raise output by 500,000 barrels per day (bpd) once sanctions are lifted in order to boost market share. Once OPEC’s second biggest exporter, Iran has seen its crude sales more than halve to around 1 million bpd since 2011.

“Iran’s top priority after the removal of sanctions is to increase its oil exports and return them to pre-sanction levels,” Zangeneh said.

“In the first days after the annulment of sanctions, we will be producing 500,000 bpd of additional crude oil and supply the market with another 500,000 bpd by the end of the year,” he added.

No date has been set for the removal of the sanctions but many believe it may come as early as January 2016.

For its return to normal export levels, Iran is faced with a supply glut amid overproduction by some OPEC members such as Saudi Arabia, which are refusing to cut output.

Those members took advantage of Western sanctions on Iran in 2011 to raise exports and fill the void left by Iranian barrels in the market.

Zangeneh said, “We were driven out of the global market with force and tyranny and for a return, we will not hesitate even for a day.”

“We believe we have to regain our market share so that we wouldn’t have to bow our head before certain OPEC members to make room for an increase in Iran’s oil exports,” the minister said.

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