NIOC increases nominal OSP for Iranian Light crude after spot price hike

Quantum Commodity Intelligence – Iran has lifted Official Selling Prices for its flagship Iranian Light grade, broadly following the trend for slightly higher April OSPs from regional suppliers.

The National Iranian Oil Company (NIOC) announced Iran Light for Asia at +$1.95/b over the Platts Oman/Dubai average for April, versus $1.75/b in March, while Iran Heavy was up $0.25/b at minus $0.45/b.

The OSPs largely followed Saudi Arabia, which set comparative grades of Arab Light at Platts Dubai/DME Oman +$1,70/b, up from +$1.50/b. Arab Heavy was up $0.30 at parity to Oman/Dubai.

However, traders said sanctioned Iranian barrels continue to trade at steep discounts in the spot market, making official OSPs largely nominal and only used as a starting point to discuss discounts.

Sources said that Chinese refiners had agreed to pay around $10/b under the Dubai or Brent benchmarks in November of last year, but Tehran has since hiked prices to nearer minus $5/b this year.

China remains the primary buyer of Iranian crude, with imports averaging more than 1 million bpd in 2023. However, January imports dipped below 1 million bpd for the first time in nearly a year, possibly as a result of the pricing dispute.

Iran's production has steadied at around 3.1 million bpd this year, with Tehran seemingly shelving plans to target 3.6 million bpd by March 2024, announced by Iran's oil minister Javad Owji late last year.

However, on Sunday, the ministry signed deals worth $13 billion with domestic firms in a bid to increase daily oil production in six major fields by a combined 350,000 bpd, although no timeline was given.