Iran sees oil at $42-$50 in annual budget

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Iran has projected average oil prices at $42 to $50 per barrel in a draft budget bill for the year to March 2017, a government spokesman was quoted as saying on Monday, expecting crude to stay in the current trading range.

“In consultation with the Ministry of Petroleum, three price options of $42, $45 and $$50 were discussed which are expected to earn [about $22.5 billion],” Reuters has quoted Mohammad Baqer Nobakht as saying.

Benchmark Brent crude has traded between $42 and $55 in the last month, and was just below $48 on Monday morning.

OPEC member Iran, which relies on crude sales to balance its budget, has called on other producers to rein in exports to support prices while it expects to boost output in 2016 when nuclear-related sanctions are expected to be lifted.

“Although oil prices have fallen, we hope that with the financial assets that will be unblocked, the public’s purchasing power can increase,” Nobakht said.

Oil revenues provide the lifeline of the Iranian economy and officials have already acknowledged that falling prices have severely undermined the country’s economic performance.

Iran’s President Hassan Rouhani said earlier that certain major oil producers collaborated with world powers to put Iran and Russia under pressure by taking measures to bring down the prices of oil.

“During the days [that Iran was under the pressure of the sanctions], some big producers of oil that are dependent on world powers decided to reduce the price of oil from $110 per barrel to $40 per barrel to undermine Iran and recently even Russia,” Rouhani was quoted by the media as saying.

The president did not name any country but chances are that he was referring to Saudi Arabia which is largely blamed for the free-fall of oil prices over the past year.

During a crucial OPEC meeting last November, Saudi Arabia pushed the Organization to maintain its production despite calls by Iran and others to reduce output and help boost prices.

This led to further plunges in prices that had almost halved from highs of above $110 per barrel within only a few months.

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