Tehran, Iran, Oct. 17
By Milad Fashtami - Trend:
Iran has decided to sell its crude oil to Asia in November at the biggest discount in almost six years.
The decision was made after Saudi Arabia cut prices for all grades and to all regions for November. Qatar and Iraq decreased their prices as well.
Tehran's move has raised some concerns about a possible budget deficit in the current Iranian calendar year (to end March 20, 2015) due to price cuts.
Iran's current year budget envisages the price of $100 for each barrel of oil. It is while according to Iran's Mehr News Agency, each Iranian oil barrel is currently sold at $86.
The figure was about $114 to $115 in spring.
Masoud Mir Kazemi, the head of energy commission in Iran's parliament and former oil minister told Mehr on Oct.17 that according to the Oil Ministry's figures, Iran exported 0.1 mbpd less that the figure considered in the budget law, which will lead to budget deficit.
Based on Iran's budget law, the country is supposed to export 1.4 million barrel oil (including gas condensate) per day.
Iran's media said on Oct. 17 that the country's President Hassan Rouhani ordered the Oil Ministry to take measures to prevent falling of oil prices by using diplomatic leverages. The details of Rouhani's order were not disclosed, but it could refer to a need for holding an immediate OPEC meeting.
However, Iranian Oil Minister Bijan Namdar Zanganeh says there is no need for OPEC to hold any emergency meeting. According to the OPEC website, the 166th (ordinary) OPEC meeting is scheduled to be held on Nov.27 in Vienna.
While there's no official data on Iran's exported crude oil during the current fiscal year (started on March 21), the International Energy Agency, the U.S. Energy Information Administration and several other entities put it at about 1.4 million barrels per day.
Meanwhile, Reuters reported that Iran's oil export have decreased again since July. On Sept. 30, the agency said Asian buyers imported only 921,064 bpd of the Islamic republic's crude in August, the lowest since the last October.
The report says, citing on government and tanker-tracking data, that the August figure is 10.5 percent less that the previous seven-month average.
Iran's oil export has fallen from 2.5 mbpd in 2011 to about 1 mbpd, while Iran's economy had shrunk by about 1.9 and 6.8 percent during the last two consecutive years.
Iran's economy largely depends on oil revenues. OPEC's annual report says that Iran exported about $61,923 worth of petroleum in 2013, while the country's total exports were worth $98,807. According to this report, Iran's GDP at market price in 2013 was about $366 billion.
The International Monetary Fund (IMF) also says that Iran's oil and natural gas export revenue was $118 billion in the 2011/2012 fiscal year (ending March 20, 2012). In the 2012/2013 fiscal year, oil and natural gas export revenue dropped by 47% to $63 billion.