Iranian oil official predicts oil prices to stand at $50
Tehran, Iran, Jan 28
By Milad Fashtami - Trend:
An Advisor to Iran's oil minister, Seyyed Mehdi Hosseini, said oil prices will most likely become stable at a range of between $50 and $60.
"Even if the prices stand at the mentioned range, Iran will face budget deficit," he said, Iran's Tasnim News Agency reported Jan. 28.
"The market's oversupply will reach 2.5 million tons in 2015, so predicting the real prices is hard," he said.
He went on to note that Iranian Oil Minister Bijan Namdar Zanganeh was not willing to take part in the recent meeting of OPEC.
"The oil ministry had predicted that big oil producing countries would not agree to production cut, so Zanganeh was not willing to attend the meeting," Hosseini noted.
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 start March 21) to $72 per barrel from the current figure of $100.
Iran is expected to face severe budget deficit in the current Iranian calendar year (to end March 20).
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 would be 30 percent less than expected.
Experts believe that due to the continuing fall of oil prices in global markets, a budget deficit in the next calendar year is also inevitable.
Edited by CN