Baku, Azerbaijan, Aug. 25
By Elnur Baghishov – Trend:
Failure to sell Iranian oil at the Iranian energy exchange (IRENEX) should not be considered a defeat, Iranian energy expert Sadegh Mardani told the Young Journalists Club (YJC), Trend reports.
According to him, the additional sales made via IRENEX require an in-depth analysis of the strengths and weaknesses of this energy exchange.
Mardani added that given the US sanctions on Iranian oil, the National Iranian Oil Company (NIOC) achieved a great success in the stock market by making discounts on oil sales.
“The [Iranian] government and the NIOC intend to provide additional discounts to win customers. Of course, there are proponents and opponents of introducing said discounts,” he said.
The energy expert said that the aim of the oil price discount on the stock exchange is to influence pricing policies.
He went on to say that it is not logical to ‘play’ with prices, and that Iran’s oil sales experience a problem due to the oil being sold to a limited number of countries.
“For example, Iran sells oil to East Asia, without targeting a specific country. But it has limited the geography of sales,” he said.
Mardani suggested that it could therefore be better to settle for other options, such as expanding and not setting limits on the geography of sales.
He also said that excessive price reduction for selling Iranian oil is not a long-term solution, as there are many customers looking for low-cost oil, and, should they be under the impression that the oil prices are being lowered for the sole purpose of increasing oil sales, they will demand additional discounts.
On August 27, Iran will put 2 million barrels of heavy crude oil up for sale at IRENEX, with the initial price of $50.37 per barrel.
Iran has been putting crude oil and gas condensates up for sale at IRENEX starting from October 28, 2018, but has so far managed to sell 1,085 million barrels of oil.
The US imposed sanctions on Iran in November 2018 and subsequently expanded the list of sanctions.