Ministry: Iran not to sell cheap oil

Oil&Gas Materials 26 January 2013 17:20

Azerbaijan, Baku, Jan.26/ Trend F.Milad‎‏

Spokesman for Iran's oil ministry Alireza Nikzad Rahbar has denied selling cheap oil to foreign companies.

Iran will never sell its oil with discount, the Mehr news agency quoted Nikzad Rahbar as saying.

He described Iran as the world's most reliable energy-supplier.

Nikzad Rahbar also said that Iran's oil export policy is not under the influence of western countries' hostile policy toward the country.

Reuters reported on Friday that South Korea's Samsung Total Petrochemicals Co has revived a contract to buy Iranian oil after a year's hiatus, as thin margins in plastics make the cheap fuel from Iran hard to resist.

Stringent U.S. and European sanctions aimed at reducing Iran's oil income and forcing Tehran to curb its nuclear program have made shipping and paying for the oil hard, halving the Islamic Republic's crude exports, the report claimed.

The deal may save Samsung Total as much as $6.7 million in costs, according to Reuters calculations.

Samsung Total stopped importing oil from Iran last year as the U.S. and European Union imposed sanctions to halt country's nuclear program. To comply with U.S. sanctions, importing countries are required to reduce purchases of Iranian oil.

Replacing the Iranian oil forced up Samsung Total's input costs, contributing to a fall in operating profits, sources said. Those profits fell 90 percent in the second-quarter of 2012, according to the company's regulatory filings. The company switched to more expensive Australian and Russian condensate last year, sources said.

Samsung Total had an annual contract to buy about 550,000 barrels a month of Iran's Kangan condensate until June last year, although it is unclear if it actually imported the full volume during the first half of 2012. The volume of the new contract is unclear.

According to the Mehr News Agency, from the beginning of 2013, Iran has renewed several oil contracts with Japanese, Turkish, and Chinese firms.