Iran has lowered prices of crude oil shipped to Asia this month to further undercut Saudi Arabian varieties, highlighting the country's resolve to regain market share following years of economic sanctions.


Saudi Arabia has set the price of the mainstay Arabian Medium for Asian sales $1.30 below the benchmark price. Meanwhile, Iranian Heavy is priced $1.60 below the�benchmark. The difference widened by 10 cents from May to 30 cents per barrel -- the biggest gap since 2008.

Since Western sanctions were lifted in January, Iran has been free to export oil again. It previously set oil prices quarterly but the latest price cut happened mid-quarter -- as was the case for March -- and marked the third price�reduction this year.

"By offering competitive prices, Iran is trying to quickly recover market share," says an oil trader at a major trading company. Iran's daily oil output in April jumped to 3.56 million barrels, up 300,000 barrels from March, according to the International Energy Agency.�The country's�production volume is now nearly back to pre-sanction levels of late 2011, and Iran is eager to secure buyers. Export volume also soared by 600,000 barrels on the month to 2 million barrels.

Saudi Arabian Energy Minister Khalid al-Falih said�last Thursday that his country would not flood the market with oil -- likely aiming to sow harmony within OPEC. But Saudi Arabia's production volume remains high. The two countries' market share battle could weigh down oil prices even as supply and demand�comes into greater balance internationally, and intensify competition among Middle Eastern oil-producing nations.

Japan's crude oil imports shrank 1% year on year in the January-April period�amid lackluster demand for petroleum products. Purchases of Iranian oil�tumbled 13%, due to such factors as restrictions�on hull insurance coverage and the fact that�Iranian oil still cannot be paid for in dollars even after the removal of the sanctions.

By Tehran Times