Tehran has been offering a handful of potential customers in Asia, including India, 180 days of free credit, according to the officials. They estimate that each month of credit amounts to a discount of roughly $1.2 to $1.5 a barrel.
But Gulf-based officials and European traders said Tehran was struggling to find new customers despite its generous credit terms. Nations in the European Union, as well as Turkey, Japan, South Korea and China, have all announced hefty cuts in their purchases of Iranian oil.
Iran's marketing offer is the latest sign that its oil industry is struggling under the impact of the sanctions. Its move comes before crucial talks between Tehran and western countries to discuss the Islamic republic's nuclear programme.
The US and Europe have imposed sanctions on Tehran's crude oil exports amid concerns that it is trying to develop a nuclear bomb. Iran insists its nuclear work is for peaceful civilian purposes to generate electricity.
With crucial talks opening this weekend, the US and its allies are set to test Iran's willingness to negotiate over its programme. The talks, the first for more than a year, are seen as an attempt to prevent possible Israeli strikes against Iranian nuclear facilities that could significantly affect oil supplies from the Middle East.
Iran's offer of longer payment periods amounts to a discount of about 7.5 per cent per $118 barrel. Saudi Arabia and other leading Middle East oil producers extend 30 days of credit, and Tehran in the past has allowed importers such as China to pay in 60 to 90 days.
"Obviously, [the extra credit is] the easiest way for them to discount," said a senior European-based oil trader. "However, I think very few will be tempted."
The International Energy Agency, the western countries' oil watchdog, estimates that Iran's oil production has fallen to a 10-year low and could drop further as sanctions disrupt an industry already suffering from years of under-investment.
Mahmoud Ahmadi-Nejad, Iran's president, struck a defiant tone this week, saying Tehran had enough savings to survive until 2015.
"They [the west] intend to impose an embargo on our oil," he said on Tuesday.
"We have as much hard currency as we need and the country will manage well, even if we don't sell a single barrel of oil for two or three years."
