Iran will run its affairs even if oil prices fall to $25
By Sara Rajabova
Iran says the falling oil prices in the world don’t pose a challenge for the country. Its officials state that Tehran will run its affairs even if oil prices fall to $25.
Ali Tayebnia, Iranian Minister of Economy who said:“Even if oil drops to $25 we will again run the budget properly,” Shana news agency reported.
“Under the circumstances where we cannot estimate the price of oil next [calendar] year, the most logical behavior would be for the government to prepare itself for all options,” Tayebnia said, adding that the government is preparing itself to deal with any oil price.
Currently, a price for per barrel of Brent is still below $50.
Tayebnia, however, noted the government will see its revenues fall by IRR 25,000 billion if oil price falls to $40.
In its budget bill for next calendar year starting on March 21, the Iranian government has sought to reduce dependence on petrodollars.
Earlier, Bijan Namdar Zanganeh, Iran’s Oil Minister said if the oil prices drop to $25 a barrel, there will yet again be no threat posed to Iran’s oil industry. He also noted that Iran has not yet decided to cut its crude oil production.
The fall in the global crude oil price from almost $110/barrel to below $50/barrel in recent months has imposed serious pressure on Iranian economy.
Es’haq Jahangiri, Iran’s first Vice-President admitted that oil prices decline to around $40 can cause problems for the administration of the country.
He also went on to say that low oil prices would slow down some projects and impose financial restrictions.
The minister dismissed reports on lowering oil prices to $40 per barrel in the next year budget.
Following the drop in global oil prices, Iran has put the crude oil price at $72 a barrel in its draft budget for the next Iranian calendar year.
Oil prices started to fall over increased supplies by certain countries such as Saudi Arabia, the largest producer in the Organization of the Petroleum Exporting Countries (OPEC), and a lackluster global economic growth.
OPEC, which pumps out about 40 percent of the world’s oil, has so far refrained from cutting its production to balance the market due to opposition from Saudi Arabia.
Iran has criticized Saudi Arabia, the world's biggest crude exporter, for its lack of cooperation in preventing the fall in oil prices. However, Riyadh has said OPEC will not cut oil production even if oil prices fall to $ 20 a barrel.
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Sara Rajabova is AzerNews’ staff journalist, follow her on
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