Iran's new revolutionary government said today that it would resume exports of crude oil next Monday, bypassing the Western consortium that once handled the bulk of Iran's exports and selling directly to foreign customers.
The new head of the National Iranian Oil Co., Hassan Nazih, told oil workers in Ahwaz that the state-run company would try to sell its crude oil for $18 to $20 a barrel, some 30 percent higher than the current price fixed by the Organization of Petroleum Exporting Countries.
Other OPEC members are reportedly selling their crude at hefty pre miums on the spot market -- in some cases reportedly as much as $23.50 a barrel -- mainly because of tight world supply due to the complete shutdown of Iranian exports, which once ranked second behind Saudi Arabia's. If Iran is able to get the prices Nazih cited, however, it would be getting as much as $5 a barrel more than raised prices announced this week by other OPEC countries for oil sold under long-term contracts.
Oil industry sources said it was uncertain whether Iran could get such a high price for its crude. They said the new government's main aim apparently was to test the market to determine just how much companies are willing to pay.
Yesterday, a Tehran newspaper reported that the government wanted to sell oil to the highest bidder, and quoted highly placed oil company sources as saying Iranian light crude could fetch as much as $24 a barrel.
Some Western oil experts, however, thought Iranian authorities were overly optimistic about the prospect of selling their oil on an ad hoc basis for as much as $20 a barrel. They said Iran may be able to get such prices on a short-term basis.
"It's naive to suppose they could sell crude on the spot market for any length of time," one said. "I think they're in for a bit of a shock. Western oil companies are looking for stable sources of supply, and they're already covered for most of their immediate needs. Besides, with Iran so unstable, why contract for such a high price when you're not even sure the deliveries will be made?"
The bulk of OPEC oil is sold under long-term contracts with foreign customers, with only a small percentage going to the spot market, industry sources said.
In addition, they said, a decrease in world demand can be expected in the coming months with the onset of warmer weather.
The official Pars news agency said the oil exports would start March 5. Nazih claimed that foreign tankers already were waiting in Iranian waters to buy oil when sales resumed.
Government officials said Iran would produce only about 60 percent of its previous oil output under the rule of the deposed Shah Mohammad Reza Pahlavi. They said this would amount to some 3.6 million barrels a day compared roughly to 6 million barrels a day previously.
Of the new production level, some 2.8 million barrels a day would be available for export after domestic needs were met. Even with the reduced production, it would take about two months to reach the 3.6 million barrel a day output target, officials said.
Western diplomatic sources said that assuming buyers could be found, Iran could probably handle those levels of production and export without the help of foreign oil technicians and administrators for the time being.
Nazih stressed that the new government was reviewing a previous agreement with the Oil Service Company of Iran, the operation arm of the Western consortium, which previously accounted for more than 90 percent of Iran's oil production.
He said Iran would no longer sell oil under the earlier conditions, indicating it would not honor a 1973 agreement to give the 14 Western consortium companies a 22-cent per barrel discount on OPEC prices for the Iranian oil they purchase.
The consortium is led by British Petroleum with a 40 percent share and includes 11 American companies. Nazih did not say under what circumstances, if any, Iran would be willing to resume its relationship with the consortium.
Nor was it clear what the government's policy would be on selling crude directly on a spot basis to American and British oil companies, deemed by radical Iranian workers to represent Western imperialism and capitalism.
In his speech to the Iranian oil workers, Nazih also ruled out any oil barter deals except for agricultural goods. Most barter deals concluded under the shah involved exports of Iranian crude against imports of expensive military equipment, but these arrangements already have been made obsolete by the cancellation of billions of dollars worth of arms deliveries.
News services reported the following developments :
Tehran Radio said a general, formerly the commander of a provincial gendarmerie, and 28 members of the shah's secret police, SAVAK, were arrested in Pakistan and sent home to face trial.
A Tehran newspaper reported that Lt. Kholan Ali Elyasi, a former state police commander, was convicted of murder and executed for ordering troops to fire on antigovernment demonstrators in the town of Khonsar.
Diplomatic sources said Iran's new rulers have ordered police not to renew the work or residency permits of foreigners.