MP: Iran to assume 1mbpd of oil exports in next year’s budget

Oil&Gas Materials 7 December 2012 15:13 (UTC +04:00)

Azerbaijan, Baku, Dec.7/ Trend F.Milad

Iran's state budget for the next fiscal year will assume exports of just one million barrels of oil a day, the head of budget commission in the Iranian parliament (Majlis) Gholam-Reza Mesbahi Moghaddam said, IRNA News Agency reported.

The Iranian government is preparing the next solar year budget for submission to Parliament, but reportedly with a significant difference from the current year budget.

Iran is expected to sell $81 billion in oil, condensate and gas during the current solar year according to the budget law which shares 17.5 per cent of the $461 billion budget (based on the official USD rate in Iran, 1226 rials, and also considered at $85 per barrel).

The current state budget relies on $53 billion worth income from petroleum, but according to Iranian president's deputy on budget issues Rahim Mambini, the administration wants to decrease the budget's dependence on oil by 30 to 40 per cent next year.

"Apparently, the government wants to decrease the 1392 (the next Iranian year starting on March 21) state budget's reliance on oil exports to one million barrels a day," Mesbahi Moqaddam was quoted by Fars News Agency on November 26.

A one million barrels per day decrease in oil export means losing $40 billion oil income in a year.

The International Energy Agency (IEA) estimates that Iranian oil exports dipped below one million barrels per day (bpd) over the summer as U.S. and European Union sanctions on Tehran tightened.

This is while according to official Iranian government data available through the Joint Oil Data Initiative (JODI) revealed that Iran exported an average of just over two million bpd in 2011.

Iranian officials usually maintain that oil exports have not been significantly affected by western sanctions and say that they are an opportunity for the country to wean itself off heavy dependence on oil.

The U.S. government has focused on blocking Iran's oil exports because it estimates that crude sales provide about half of Iranian government revenues.

The IEA estimates that Iranian oil exports bounced to 1.3 million bpd in October. However if the country's budget planners are now expecting to sell only one million bpd on average next year, it implies Iran expects to make around $110 million less each day from oil sales than before sanctions tightened in early 2012, Reuters reported.