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Oil Trade to Convert to Euro, Yen

Mechanism for paying for Iran's oil exports will completely change into the euro and yen from the dollar, said Director of International Affairs at the National Iranian Oil Company (NIOC), Ali Arshi on Tuesday.

Arshi said that signing contracts for direct selling of oil with refineries aimed at eliminating middlemen and converting payment mechanism from the dollar into euro and yen are the two major policies of NIOC, Mehr News Agency reported.

He recalled that the global hegemonic powers have been trying to impede the development of Iran's oil industry and sale of its crude by imposing various sanctions, adding that Iran has always found a solution in line with its brand of interests in order to confront any restrictive move, like sanctions.

"Iran is the second country in the world in terms of crude reserves and this is of great importance in the global market. Currently, NIOC plays its role as a reliable supplier of oil in the best possible manner given the conditions of the market and respective policies of Organization of Petroleum Exporting Countries (OPEC)."

Arshi outlined NIOC's export policies as utilizing modern marketing methods to maintain the current markets, working for identifying potential markets and entering newly emerging markets such as China and India, which are experiencing an increasing growth in demand.

He also said that the company is considering replacing oil with natural gas in the local consumer market in a bid to boost export of oil.

OPEC Mulls Boosting Output
OPEC oil producers are consulting about a supply boost but many in the group remain skeptical, saying high prices are due to fears of shortage and world supply is comfortable despite the loss of Libyan crude.

"We are in consultations about a potential output increase, but have not yet decided," Kuwait's Oil Minister Sheikh Ahmad al-Abdullah Al-Sabah told reporters on Tuesday, Reuters wrote.

OPEC oil ministers have said there was no plan to meet ahead of the group's next scheduled gathering in June. Iran holds the OPEC presidency, a coordinating role rotated annually.

Iran Sees No Need
Iran's OPEC governor Mohammad Ali Khatibi downplayed speculation of more OPEC oil.

"There is no shortage in the market," he told Reuters. "There is no need for further OPEC supply."

"But the consumers are worried, this is psychological."

Khatabi said he had heard OPEC members were engaging in consultations, but there was "no concrete decision for an OPEC emergency meeting."

Brent oil prices fell by more than $2 after the Kuwaiti minister's comments about a potential output boost, but by 1113 GMT was only 8 cents down at $114.96 a barrel.

On February 24 Brent hit $119.79, its highest since 2008, when it reached an all-time high of $147.50.

Saudi Already Increased
Kuwait has not boosted supplies, Al-Sabah said, but added that Saudi Arabia was likely in the process of boosting production in response to the Libyan situation.

Senior sources in Saudi Arabia, the world's largest crude exporter, told Reuters last week that the kingdom has already increased production and was pumping around 9 million barrels per day.

Saudi holds the bulk of OPEC's spare output capacity which can be tapped swiftly. The market looks to the kingdom, sitting on a spare capacity of around 3.5 million barrels per day, to make up for any shortage of oil.

Fellow-member Nigeria would increase its crude oil production if OPEC requested higher output to cool soaring oil prices, state oil company NNPC said on Tuesday.

© Iran Daily 2011