Iran Set to Reduce February Oil Prices for Asia on Saudi Cuts

National Iranian Oil Co. is set to reduce its official selling prices of crude oil to be supplied next month to Asia after Saudi Arabia cut prices, Bloomberg reported on Wednesday.

Iran's state oil company will set Iranian Light for February shipments at 35 cents a barrel above the average of Persian Gulf benchmark Oman and Dubai grades, based on a quarterly formula tied to Saudi Arabian Oil Co. prices, which National Iranian has followed in the past. The premium will be the smallest in five months, down from January's 70 cents.

Saudi Aramco, as state-owned Saudi Arabian Oil is known, yesterday decreased the price for Arabian Light crude to Asia by 35 cents a barrel, according to an e-mailed statement from the Dhahran-based company.

Iranian Heavy will be reduced by 40 cents a barrel to a discount of 65 cents to the Oman-Dubai average, according to the formula. Forozan Blend grade, linked to Saudi Aramco's Arabian Medium grade, will be lowered by 40 cents a barrel to a discount of 60 cents.

National Iranian will formally announce its prices for the three grades to be supplied to Asia, the Mediterranean, Northwest Europe and South Africa by next week. It will also set February prices for Soroush and Norooz grades, which are shipped only to Asia and the Mediterranean.

Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, pumped 3.8 million barrels a day last month, more than its quota of 3.34 million, according to a Bloomberg News survey of analysts and producers. The country has the capacity to produce 4.1 million barrels a day.

/Trend News/