Iran to continue relying on oil exports, says energy expert

Oil&Gas Materials 23 December 2020 16:55 (UTC +04:00)
Iran to continue relying on oil exports, says energy expert

TEHRAN, Iran, Dec.23


Iran's oil sale price prediction in the next Iranian year (starts March 21, 2021) is logical, said an energy expert.

"Iran's oil export share that predicted in the new Iranian year budget plan could be reviewed economically and politically. From an economic point of view predicting oil sale with a price of $40 per barrel is a logical prediction, at the moment there is a coronavirus problem, and oil price is higher than $50 the predicted price for oil export in the next Iranian year is budget is logical but the prediction of selling 2.3 million barrels of oil required consideration," Morteza Behrouzifar told Trend in an interview.

"The highest volume of oil production before sanctions was 4 million barrels and at that time oil export was about 2.5 million barrels per day, if we want to hold the previous position in the market in next year then OPEC Plus production ceiling should also be reflected," he pointed out.

"If we presume sanctions would be lifted and Iran could find its place in the market then it requires to cut output as all OPEC countries agreed to reduce their oil production between 10 to 25 percent. So even if we enter the market we should follow the (OPEC) decision, the 10 percent output cut would reduce about 400,000 barrels of Iran's oil export and the production ceiling would reach to 2 million bpd," he added.

Behrouzifar went on to say that the price of oil in the budget is low and the predicted revenues from oil export are obtainable. Furthermore from a political point of view, the budget would indicate to the world that Iran would export considering the amount of oil which means sanctions would be lifted.

"Due to sanctions Iran is exempted from cutting oil output, there was a similar situation years after the signing of the Joint Comprehensive Plan of Action (JCPOA) and Iran told OPEC that it wants to reach previous output ceiling but we are still not in such stage at the market. If we want to enter the market and reach the previous place it's logical to have the same output cut as other countries," Behrouzifar said referring to possible output cut based on the OPEC agreement.

"It depends on what are the interaction of other countries with Iran and what interaction we would have with them," he said referring to whether OPEC would allow Iran to follow the regulation of output cut until it obtains its share of the market.

According to Behrouzifar, it would be detrimental to Iran's economy to start a price war with OPEC.

"The reliance on oil export in current Iranian year was due to the fact that we could not do it and not that we did not want to reduce reliance," he said referring to the result of increasing budget reliance on oil

"I wish Iran could use the money from oil export to invest for future generation but those that talk about reducing reliance on oil sale should offer an alternative solution for revenues to the government, and one could not ignore government costs, we would remain dependent on oil, for now, it would only change if we plan for the future," he noted.