Iran General NewsIran informs 21 oil customers of supply cuts-report

Iran informs 21 oil customers of supply cuts-report

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ImageReuters: Iran has told 21 Asian and European customers it will reduce oil sales to them, its OPEC governor said in remarks published on Sunday, as Iran and other members of the cartel cut output to halt sliding prices.

ImageTEHRAN, Jan 18 (Reuters) – Iran has told 21 Asian and European customers it will reduce oil sales to them, its OPEC governor said in remarks published on Sunday, as Iran and other members of the cartel cut output to halt sliding prices.

Mohammad Ali Khatibi, Iran's representative to the Organization of the Petroleum Exporting Countries (OPEC), said the cuts were part of the country's total supply curbs of around 550,000 barrels per day (bpd) since September last year.

He said this was Iran's share of OPEC cuts totalling 4.2 million bpd, including a record 2.2 million bpd from January.

"The production is reduced exactly that amount (550,000 bpd)," he said, referring to earlier statements by the head of the state National Iranian Oil Company (NIOC).

OPEC has embarked on a series of cuts in response to a global economic downturn which has hit energy demand, sending crude down by about $110 per barrel since a July peak of $147.

Earlier this month, sources with the lifters said Iran would reduce oil supplies to at least two of its Asian customers by 14 percent in January, the most visible sign yet of OPEC's No. 2 producer implementing deep output reductions.

Khatibi said 21 customers in Europe and Asia had been informed about cuts, in comments published by Iranian newspapers on Sunday. The report, originally carried by the Mehr News Agency, did not give any figures or name the companies affected.

"Twenty-one Asian and European companies have been told that there will be a cut in part of their oil intake level proportionate to their contracts," Khatibi said.

Khatibi told Reuters the information came from NIOC's marketing department: "Generally they have informed customers that they should reduce certain amounts from their contracts,", he said, adding Iran had also curbed spot sales.

Some OPEC delegates and analysts have in the past voiced concerns about Iran's compliance with previous output restrictions.

Iran, which says it is doing its part, has typically opted to curb spot crude sales rather than make clear, across-the-board cuts to long-term customers as most Gulf producers do.

Oil traded at around $36.50 per barrel on Friday, up 3 percent with short covering outweighing a gloomy demand outlook, but still down more than $110 since July as a global economic downturn hits energy demand.

On Saturday, Khatibi said OPEC should reduce output further in order to bring balance to the oil market, state radio reported.

Separately, the managing director of Iran's Offshore Oil Company, Mahmoud Zirakchzian, said the lower oil price had not stopped its development of small oil fields in the Gulf region, Mehr News Agency reported.

(Reporting by Hashem Kalantari; Writing by Fredrik Dahl; Editing by Richard Hubbard)

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