2015 a bad year for Iran

2015 a bad year for Iran

By Dalga Khatinoglu

Oil prices plunging by half during the second half of 2014, and continuance of the drop in January, as well as disappointing estimations about the long-standing glut in oil markets, imply a bad year ahead for Iran.

Iran decreased its reliance on oil revenues in the government budget from above 40 percent to 31.5 percent, but this even seems overly optimistic. A barrel of oil in the budget bill is put at $72 while currently each OPEC crude oil basket is sold at $43.24/barrel.

Iranian parliament amended the construction budget, pushing it down by $2.1 billion and decreased the share of the National Development Fund from oil revenues from 30 percent to 20 percent on Jan.27.

According to the bill, it's expected that 1 million barrels per day (mb/d) of crude oil and 300,000 barrels per day of gas condensate are to be exported during next fiscal year, which will start on March 21.

According to the International Monetary Fund's latest report on the Middle East and Central Asia, released last week, Iran could increase the oil export from 1.13 mb/d in 2013 to 1.24 mb/d in 2014, but the figure would decrease to 1.15 mb/d and 1.07 mb/d in 2015 and 2016 respectively.

The country's oil production also is expected to decrease by180,000 barrels and 90,000 barrels per day during in 2015 and 2016. Iran's oil production was about 4 mb/d during the last decade, but lacking of notable progress in upstream projects as well as huge drop of oil production level due to aging fields led to a significant decline in output decline.

Iran hasn't been able to start any new oil fields since 2007, while 80 percent of the current productive fields are in their second half-life with an 8 to 13 percent drop in production level annually.

Iran's Deputy Oil Minister for Engineering Affairs Seyyed Emad Hosseini said on Jan.28 that Iran's gas production has increased from 400,000 barrels per day in some fields to 60,000 barrels per day and the figure is expected to reach zero in near futures.

IMF puts the country's breakeven oil prices at $107/4 and $119/4 for the current and next year (The oil price at which the fiscal balance is zero).

A glance at IMF's report about Iran's economic performance








Real GDP Growth (%)







Oil GDP growth (%)







Nominal GDP (Bln $)







Consumer Price Inflation (Year average; percent)







Broad Money Growth

(Annual change; percent)







Exports of Goods and Services

(Bln $)







Imports of Goods and Services

(Bln $)







Gross Official Reserves (Bln $)







Edited by CN

Dalga Khatinoglu is an expert on Iran's energy sector, head of Trend Agency's Iran news service.

Follow him on @dalgakhatinoglu

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