Oil hike comes as surprise

Press, 29 March 1980, Page 8

Oil hike comes as surprise

NZPA-Reuter Teheran

Iran’s announcement of an increase of about SUS2 a barrel in its oil prices has taken the world’s oil industry; by surprise at a time when supplies are plentiful and . free' “spot” market prices are falling.

The Iranian Oil Minister (Mr Ali Akbar Moinfar) told NZPA-Reuter in a telephone interview that the official price of Iranian crude oil set at SUS3I since February would rise about SUS2 from April 1, but did not give the exact amount of increase.The increase will take the average price of Iranian light crude to about $U534.50 a barrel, well above the average of the; Organisation' of Petroleum Exporting Countries, as Iran also charges SUS 3 premium on about half the oil it sells under contract. Informed sources said new customers were being asked to pay a higher, $U54.25 premium. Diplomats and economic analysts in Teheran said Iran would find it difficult to sign new sales contracts at these levels, as prices on the international spot market where oil not sold on contract is freely traded, are below them.

Iran has signed contracts with more than 40 companies to sell a total of about 1.7 million barrels a day, officials say. with Japanese and British firms, including British Petroleum,., the main customers. , , .t.

There is a- modest glut of. oil : 'on the world market? Venezuela, . Kuwait and Libya have announced cuts in output and; Venezuela, much of whose oil exports take the form of refined products, this week announced a nine per cent cut in', residual-heavy fuel-oil ►prices.;. r