Offering heavy discounts to the customers was first initiated by Saudi Arabia, and subsequently other producers tried to offer higher discounts in order to make their crude oil consignments more attractive.
Meanwhile, similarity of Saudi crude oil’s specification with Iran’s crude and offering of more discounts by Riyadh can result in the possession of Iran’s oil market. Therefore, officials of the National Iranian Oil Company (NIOC) will reduce the price of Iran’s heavy oil in proportion with Saudi Arabia’s discount.
Mohsen Qamsari, Manager of International Relations of NIOC says competition in the Asian market is for obtaining more share and Iran is intended to drop its crude oil price in the market.
In reply to a question that Iran will drop its oil price in the Asian markets like Saudi Arabia, he said: “Finally we should compete and Iran will reduce its price formula.”
As for the drop in Saudi oil price, he said Saudi Arabia holds five markets in its possession for selling crude oil and it has increased its oil price in the four markets of Europe, Africa, the US and North Europe and has reduced only in one market and all have focused on that market and pay no attention to the other markets.
Asked if the drop in Saudi oil price in the Asian market was to put Iran under pressure, Qamsari said: “It is not the subject of dealing blows on Iran; currently competition is so right in the Asian market and the US, South America, Venezuela and even Russia are present in the Asian market. Therefore, competition is so tight and it looks logical if Saudi Arabia drops its oil price in order to gain its share.”
“Saudi Arabia is acting principally upon market conditions and perhaps if Iran were in place of this country, it would have acted the same.”
