Iran to seek automatic oil rises

Press, 29 August 1979, Page 9

Iran to seek automatic oil rises

NZPA-Reuter Bahrain Iran is urging the 13nation Organisation of Petroleum Exporting Countries to adopt a formula to adjust oil prices automatically at least every three months, the “Middle East ’Economic Survey” has said. The journal quoted Dr Mohammed Ali Movahed, adviser to the chairman of the National Iranian Oil Company, as saying that Iran would insist on such a formula at the next O.P.E.C. conference.

“In this way the consumers will know in advance what the prices are likely to be and there will be no need to take up Ministerial time in conferences,” Dr Movahed said. The formula would have to cover inflation and currency fluctuations, Dr Movahed said in the interview. He said the present Iranian oil production ceiling of about four million barrels a day would continue for a while because it was adequate to meet the Government’s financial requirements.

He said Iran was dissatisfied with the price of Iranian gas exported to the Soviet Union in particular, and with the world gas price situation in general. Iran would not export any more gas until it became economic to do so, he said.

Iran did not want to commit its oil beyond one year, and his appreciation of the situation was that the Iranian authorities wanted to maintain and expand the petrochemical industry.

The oil exploration programme would also be pursued with great force, once things had settled down, Dr Movahed said.

The journal also said that Iran had raised its contract prices for all grades of crude oil by 21c a barrel from August 15 in lieu of reducing credit terms from 60 days to 30 days, as most O.P.E.C. members had done recently. Iranian light crude now cost $22.21 a barrel and heavy crude $20.11, he said.