Forecast of 'Iran's Oil Sales Decreasing to Less Than Half' in the 1398 Budget

Iran's Supreme Economic Coordination Council reviewed the 1398 budget in its session on Sunday, and according to reports, it predicts a decrease in oil sales to about one million barrels, a reduction in the National Development Fund's share of oil revenue, and the provision of essential goods with government currency as key features of this budget. Based on this forecast, Iran's oil sales in 1398 are expected to be less than half of the projected sales for 1397. The Supreme Economic Coordination Council was formed after the U.S. withdrawal from the JCPOA and the re-imposition of sanctions. The heads of the three branches of government and several government officials are members of this council. According to IRNA news agency, this council reviewed the 1398 budget on Saturday, December 1, emphasizing attention to the needs of the people, especially low-income groups. The report states that 'ensuring the provision of essential goods for the people with government currency,' 'increasing the salaries of workers and retirees and supporting production and employment,' and 'completing unfinished projects with the participation of the people and the private sector' are the three 'main approaches' of next year's budget. Previously, government officials had announced that due to U.S. sanctions, government revenue in the next year's budget would be lower. Meanwhile, Fars news agency reported that the amount of oil sales in the next year's budget is projected at one million barrels per day at a price of $60 per barrel. Currently, the price of Brent oil is less than $60, and West Texas Intermediate oil is around $51. The price of each barrel of Iranian crude oil is usually two or three dollars less than the price of North Sea Brent oil. In this year's budget law, exports of more than two million barrels of crude oil and gas condensates at an average price of $55 were projected, which was expected to bring in slightly more than $48 billion for the country. The Research Center of the Iranian Parliament had previously predicted that with the return of U.S. oil sanctions, Iran's oil exports would decrease to a range of one million to one million and five hundred thousand barrels per day in optimistic and pessimistic scenarios, respectively. The average oil and gas condensate exports from Iran last year were 2.5 million barrels per day, peaking at 2.8 million barrels before the U.S. withdrawal from the JCPOA. Iran's oil exports have decreased following the return of U.S. sanctions, and at the same time, Reuters reported on Friday, December 1, that Iran's total oil exports to Asia last month reached 762,000 barrels, the lowest level in the past five years. Fars news agency also reported that due to the 'significant decrease' in oil exports, there was opposition in the Supreme Economic Coordination Council to depositing 10% of oil revenues into the National Development Fund. According to this report, withdrawing from the National Development Fund for the budget was also one of the proposals discussed in this meeting. These proposals must be approved by the Supreme Leader of the Islamic Republic after being ratified. According to the Sixth Development Plan, the share of the National Development Fund from crude oil and gas exports was set at 30% in the first year of this plan and must increase by at least two percent annually. According to the internal regulations of the Parliament, the government is obliged to submit the budget bill for the next year to the Parliament by December 6, and previously, Mohammad Baqer Nobakht, the head of the Management and Planning Organization, announced that the budget would be approved by the government on Sunday.