New Decline in Oil Prices in Asian Markets

Following the International Energy Agency's forecast that oil prices are expected to rise only slightly over the next five years, oil prices in Asian markets faced a new decline on Tuesday, February 9. According to AFP, on this day, the price of Brent crude oil for March delivery fell by 77 cents to reach $57.57. Meanwhile, West Texas Intermediate oil, which is used as a benchmark for pricing oil in global markets, saw a decrease of 74 cents, bringing its price down to $52.12. The International Energy Agency, in its recent five-year forecast report, stated that current oil prices, which have reached the level of $50 to $55 per barrel, are expected to improve slightly and rise to $73 per barrel by 2020. This forecast is significantly lower than the $100 per barrel price that oil was trading at in global markets until June, prior to the severe price drop. Oil market analysts told AFP that this forecast from the International Energy Agency has contributed to a further decline in oil prices in Asian markets on Tuesday. Oil prices, which peaked in mid-2014, are currently experiencing a severe drop primarily due to the increase in shale oil production in the U.S. and a decrease in global demand. Iranian officials attribute the decline in oil prices to the 'design of certain countries,' and Iranian President Hassan Rouhani stated on February 23 that 'although oil prices have now dropped to about half compared to previous months, those who have designed the drop in oil prices against certain countries will regret it.' In Iran's budget bill for 2014, the price of oil was projected at $100 per barrel, but following the unprecedented drop in oil prices in recent months, the Iranian government was forced to reduce this figure to $72 per barrel for the upcoming year. Oil prices have now reached about $50 per barrel, marking their lowest level in six years. In this context, Iran continues to export oil by 'bypassing economic sanctions,' and OPEC's production has increased again in January despite falling prices, leading to a budget deficit of 10 trillion tomans for the Iranian government in the first nine months of this year.