OPEC producers cut oil prices to Asia in battle for share

PUBLISHED ON FEB 11, 2015 1:48 PM

DUBAI (Bloomberg) - Iraq and Iran joined Saudi Arabia in cutting their March crude prices for Asia to the lowest level in more than a decade, signaling the battle for a share of OPEC's largest market is intensifying.

Iraq's Basrah Light crude will sell at US$4.10 a barrel below Middle East benchmarks, the lowest since at least August 2003, the Oil Marketing Co. said Tuesday. National Iranian Oil Co. lowered its official selling price for March Light crude sales to a discount of US$2.10 a barrel, the lowest since at least March 2000, according to a company official who asked not to be identified because of corporate policy.

The cuts come after Saudi Arabia, the largest crude exporter, reduced pricing to Asia last week to the lowest in at least 14 years. The Organization of Petroleum Exporting Countries left its members' output targets unchanged at a November meeting, choosing to compete for market share against U.S. shale producers rather than support prices. Iraq is the second-biggest producer in OPEC and Iran is fourth.

"This is an effort by some producers to protect market share," Sarah Emerson, managing principal of ESAI Energy Inc., a consulting company in Wakefield, Massachusetts, said by phone Tuesday. "It's really straightforward; cutting prices is how you keep your foot in the door."