Iran Raises Oil Prices for Asian Buyers

Iran has set the official selling price of light crude oil for August 2023 to be "three dollars and fifteen cents" per barrel above the regional Oman/Dubai benchmark price, which is an increase of "15 cents" compared to July's price. According to Reuters, on Monday, July 17, the price of Iran's heavy oil for August was also set at "one dollar and ten cents" per barrel above the Middle East benchmark price, reflecting a "five cent" increase from July. Iran is a member of OPEC, the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, but its production quota in this cartel has been suspended due to U.S. sanctions. The increase in Tehran's oil exports undermines Riyadh's efforts to maintain prices by limiting production. The price of Brent crude oil, the international oil benchmark, has decreased by about 20% since OPEC and its allies, led by Russia, first shook the market by cutting production by two million barrels in October. Meanwhile, Iran announced in May that it had increased its oil production to over three million barrels per day, while before the U.S. withdrawal from the Iran nuclear deal in 2018 and the re-imposition of sanctions, this figure was around 2.5 million barrels per day. The Secretary-General of OPEC states that crude oil will not be replaceable for at least the next 20 years. The increase in Iran's "cheap oil" exports coincides with a reduction in Saudi production. The meeting of the foreign ministers of the Islamic Republic of Iran and Sudan after seven years continues the economic concerns and the relative increase in the price of Brent crude oil in the global market. Saudi Arabia and Russia are again reducing their oil production.