In a bid to retain its market position, Iran is lowering its crude oil prices vis-à-vis Saudi Arabia, Reuters reports.
Iran’s national oil company, the National Iranian Oil Company (NIOC), lowered its December prices for both Iran Heavy and Iranian Light crude in comparison with similar Saudi Arabian grades, according to Reuters.
Iran Heavy will be sold at its biggest discount compared to Saudi Arabia’s Arab Medium since at least 2007, according to the news agency. The price of Iranian light is also dropping against Saudi Arabia’s Arab Light.
The discounts are following increased pressure from the United States. Earlier this fall, US President Donald Trump chose not to recertify an agreement between world powers and Iran to grant sanctions relief in return for a suspension of Iran’s nuclear program. This decision has raised the possibility that the US Congress could apply new sanctions on Tehran.
“The threat of US Congress sanctions has put pressure on Iran to ‘firm up’ markets via discounts and freight adjustments for its crude,” a consultant at Muse & Stancil, told Reuters.
Contributing to the spread between Saudi Arabian and Iranian crude oil prices, Saudi Arabia lifted its official selling prices (OSPs) for December, Platts reported at the beginning of November.