Iran to export crude to Asia at record premium
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National Iranian Oil Co is poised to set record price premiums for next monthâ€™s crude sales to Asia after increases by Saudi Arabia yesterday.
The state oil company will raise the premium of Iranian Light for November shipment to $2.94 a barrel above the regional benchmark, which is an average of the Arabian Gulf Oman and Dubai grades, based on a formula linked to Saudi prices. This is up $1.05 from the October premium. Saudi Arabian Oil Co yesterday boosted Arab Light, its biggest grade by volume, by the same amount, according to an e-mailed statement.
Middle East exporters are raising prices for their mainly high-sulfur crudes as refinersâ€™ losses from turning oil into residual products decline. Fuel oilâ€™s discount to Dubai crude, known as the crack spread, narrowed 53 per cent in September from the prior month to $2.72 a barrel, according to PVM Oil Associates Ltd, a London-based broker.
The premium of National Iranianâ€™s November shipments of Iranian Heavy and Forozan Blend crude to the the Oman-Dubai average will each be increased by $1.45 a barrel, based on the formula. Saudi Arabian Oil, or Aramco, raised its Arab Medium variety by the same amount. The two Iranian grades had been at discounts to the benchmark since September 2009.
Tehran-based National Iranian may announce prices for shipments to Asia, the Mediterranean, Northwest Europe and South Africa next week, said a company official by telephone, asking not to be identified because of internal rules. Itâ€™s also due to set November prices for Soroosh and Norooz, which are supplied only to Asia and the Mediterranean.
Iran, the Organisation of Petroleum Exporting Countriesâ€™ second-largest producer, pumped 3.59 million barrels a day of crude in September, according to a Bloomberg survey. The country has a daily capacity of 4 million barrels. Saudi Arabia is Opecâ€™s biggest producer.
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