April 5 (Bloomberg) -- National Iranian Oil Co. is set to cut official selling prices for heavier grades of crude supplied to Asian refiners to 15-month lows after reductions by Saudi Arabia yesterday.
The state oil company will set Iranian Heavy for May shipments at $1.60 a barrel below the average of Persian Gulf benchmark Oman and Dubai grades, based on a quarterly formula tied to Saudi Arabian Oil Co. prices, which it has followed in the past. That is 10 cents lower than April, bringing the discount to its widest since February 2009.
Saudi Aramco, as state-owned Saudi Arabian Oil is known, yesterday cut its price for Arab Medium crude to Asia by 10 cents a barrel, according to an e-mailed statement from the Dhahran-based company.
“I guess they, Aramco, know actual demand for petroleum products hasn’t been so strong,” said Shohei Setoh, a crude trader with Japan Energy Corp. in Tokyo. “Few people think demand is strong enough to support the physical market.”
National Iranian’s Forozan Blend crude, also linked to Saudi Aramco’s Arab Medium, will probably be lowered for May shipments by 10 cents a barrel to $1.55 below the Oman-Dubai average, based on the formula. Iranian Light is expected to be raised to a 10-cent premium to the benchmark.
National Iranian will formally announce its prices for the three grades to be supplied to Asia, the Mediterranean, Northwest Europe and South Africa this week, said an official, who asked not to be identified citing company policy. It’s also due to set May prices for Soroush and Norooz grades, which are shipped only to Asia and the Mediterranean.
The following table shows the prices of Iranian crude oil to be supplied to Asia, as a differential to the average of Oman and Dubai grades, and the month-on-month change. Prices are in dollars a barrel.
--Editors: John Viljoen, Ryan Woo.
To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net
To contact the editor responsible for this story: Jane Lee at jalee@bloomberg.net
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