Lifting Iran sanctions may bounce back oil price

Tehran, Iran, Jan. 23

By Milad Fashtami - Trend:

Iranian Oil Minister Bijan Namdar Zanganeh said if the sanctions imposed on Iran are lifted, oil prices may bounce back in global markets.

"If the sanctions are lifted, the prices will become reasonable once again," he explained, Iran's Mehr News Agency reported on Jan. 24.

"The OPEC has no red line for cutting oil production," he explained.

The price of oil has dropped 50 percent compared to the first half of the past year. The fall in the oil price has even been more in OPEC's basket, which plunged by 60 percent, mostly because the 12 members of OPEC are producing 1.3 million barrels of oil per day more than the global demand and increasingly giving discounts to their customers.

Iran is expected to face a severe budget deficit in the current Iranian calendar year (to end March 20) due to the falling trend of oil prices in global markets.

The country 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.

Based on Iran's budget law, the country is supposed to export 1.4 million barrels of oil (including gas condensate) per day.

Reports suggest that if the current tendency continues, the total budget deficit may soar above $2.5 billion.

The Iranian President Hassan Rouhani also predicted that Iran's total oil revenues will be 30 percent less than expected.

Experts believe that a budget deficit in the next calendar year (to start March 21) is also inevitable.

Falling global oil prices forced Iran's government to decrease the oil price figure in the proposed budget bill for the next Iranian calendar year to $72 per barrel from the current figure of $100.

Edited by CN

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