Pride or lunacy? Iranian govt says it can run the country on below $40 oil

Published January 26th, 2015 - 04:55 GMT

He said the government is revising its draft budget to assume a base price of $40, from $72 a barrel.
He said the government is revising its draft budget to assume a base price of $40, from $72 a barrel.
Iran’s Government Spokesman Mohammad Baqer Nobakht says the administration can run the country with oil revenues below $40 billion in the next Iranian calendar year (March 2015-March 2016).
 
He said this goal can be achieved within the framework of the resistance economy, the Mehr News Agency reported on Saturday.
 
Although Iran was run with the oil revenues of $55-60 billion in the recent years, global drop in the oil prices has shocked the country’s economy, the official mentioned.
 
“Oil plays a determining role in Iran’s incomes; therefore, oil revenues could not be underestimated in the national economy, but, we should plan to use them in a more efficient way”, he added.
 
In a decree issued on February 2014, Supreme Leader Ayatollah Ali Khamenei outlined the general policies of the country’s “resistance economy,” under which, the government must take action to expand the production and exportation of knowledge-based products, increase domestic production of strategic goods, and develop markets in neighboring countries. 
 
On January 15, Finance and Economic Affairs Minister Ali Tayyebnia stated the Iranian administration is planning to lower the crude oil price for the next Iranian year’s budget to $40.
He said the government is revising its draft budget to assume a base price of $40, from $72 a barrel.
 
Oil prices have fallen 60 percent from their June 2014 peaks, driven down by rising production, particularly of U.S. shale oil, and weaker-than-expected demand in Europe and Asia.
 
Iran faces international sanctions on its energy industry over its nuclear program, with the European Union banning imports of crude from the country. 

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