Iran says can handle oil price below $25 per barrel
Baku, Azerbaijan, Jan. 20
By Umid Niayesh - Trend:
Iran can handle the problem if the oil prices fall to $25 per barrel, the Islamic Republic's Economy Minister Ali Tayebnia said.
Even if oil prices fall to $25 per barrel the government can manage the country, Tayebnia said, the Islamic Republic's ISNA news agency reported Jan. 20.
While commenting on the proposed $72/barrel oil price for next year (to start on March 21) budget bill, he said that predicting the oil price for next year is impossible, adding the government should be prepared for all scenarios.
In a similar statement Iran's oil minister, Bijan Namdar Zanganeh told reporters on Jan. 19 that if the oil prices drop to $25 a barrel, there will yet again be no threat posed to Iran's oil industry.
He added that the Islamic Republic is looking forward to cooperation with the OPEC members.
The fall in the global crude oil price from almost $110/barrel to below $50/barrel in recent months has imposed serious pressure on the Islamic Republic's economy.
The OPEC oil basket price was $107.89 in mid-June, but has been in dramatic decline, especially after October. The price stood at $43.4 a barrel on Jan. 16.
The falling oil prices forced Iran's government to decrease the oil price figure in the proposed budget bill for the next Iranian fiscal year to $72 per barrel from the current figure of $100.
Oil revenues share about 50 percent of Iran's current fiscal year budget, meanwhile the figure has been decreased to 33 percent in next year's budget bill.
President Hassan Rouhani already confirmed that the Islamic Republic's oil revenues have decreased by 30 percent as a result of the price fall.
Experts believe that due to the continuing fall of oil prices in global markets, a budget deficit in the current and next fiscal year is inevitable.
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