TEHRAN (Reuters) – Iran is exporting oil as usual and has no plans to cut crude exports, a senior oil official told Reuters on Wednesday, a day after the president was quoted as saying Tehran was considering a plan to cut output.
“There is no plan to cut exports and we keep our promises (to clients) … and we export as usual,” said Hojjatollah Ghanimifard, international affairs director at the National Iranian Oil Company (NIOC).
Oil surged to a record peak near $127 on Tuesday after Iranian President Mahmoud Ahmadinejad was quoted as saying OPEC’s second largest producer was studying a plan to cut output despite signs record-high prices are hurting consumer nations.
Iranian Oil Minister Gholamhossein Nozari on Tuesday also said Iran was reviewing how much oil it pumps, but no decision had been taken on any changes.
Any decision to trim output would relate to the balance of supply and demand in the oil market, not political factors, an oil industry source said on Wednesday.
“With prices as high as they are it makes no sense to cut output for political reasons,” the source said. “It would be too great a loss economically to us.”
Concern in the oil market that Tehran’s dispute with the West over its nuclear program may lead to a disruption in its crude exports have helped drive oil to record highs.
But the review of crude output may be related to bearish signs from the oil market for supplies of some of the heavier crude that Iran exports, the oil ministry source said.
“In the market, buyers are calling for steeper discounts for heavier crude,” said the source. “This is a reason why officials may talk about cutting output.”
The world’s top oil exporter Saudi Arabia has cut the official selling price for its heavier crude for three consecutive months, setting the trend for other oil producers in the region such as Iran.
Heavy crude prices typically suffer at this time of year as refiners switch to lighter crude which is easier to make into gasoline to meet summer vacation demand from motorists.
Tehran’s crude output review may also be related to the growing volume of oil Iran is holding offshore in vessels being used as temporary storage during the seasonal spring lull in demand from global refiners, an oil industry source said. Refiners typically do routine work in spring.
Iran has vessels with capacity to hold over 28 million barrels of crude offshore as it waits for refinery demand to pick up.
Consumer nations have called on OPEC to ramp up production to help ease the sting of high fuel prices, but most members have resisted, saying that markets are well supplied and stocks ample.
Iran’s production topped 4.2 million barrels per day (bpd) in March, nearly 5 percent of global supply and its highest since the 1979 Islamic revolution. Refiners in Asia said on Tuesday they had not been told of any potential cut in supplies.
The supply threat added to a global market already uneasy over supplies of distillates like heating oil and diesel fuel.
Oil was little changed below $126 on Wednesday, with traders awaiting an expected rebound in weekly U.S. distillate stocks and still on edge over the previous day’s report from Iran.