Nobakht: Oil Prices Expected to Reach $80

The Vice President for Strategic Planning and Supervision of the Iranian President states that according to 'predictions from some experts,' the average oil price will reach $80 next year. He did not provide specific details about these 'experts' predictions. According to Tasnim News Agency, Mohammad Baqer Nobakht, on Tuesday, January 8, referred to 'some analyses and news' stating that Saudi Arabia has predicted the price of oil per barrel at $80 in its budget for the coming year. He added, 'Unlike our country, which clearly presents budget figures, Saudi Arabia has provided the total number and amounts that need to be sold.' Mr. Nobakht said, 'Various media have also reported that an economic advisor in Saudi Arabia has stated that oil from this country is predicted to be above $80 in the budget.' In Iran's budget bill for 2015, the price of oil was initially set at $100 per barrel, but following an unprecedented drop in oil prices in recent months, the Iranian government was forced to reduce this figure to $72 per barrel for the next year. Saudi Arabia, the world's largest crude oil exporter, announced on Thursday, January 4, that it faces a significant budget deficit of $38.6 billion in 2015. According to the Saudi government, the country will have expenditures of $229.3 billion in 2015 'while the revenue from oil sales is estimated at 715 billion Saudi riyals ($190.7 billion).' Ali Al-Naimi, the Saudi oil minister, previously stated that even if oil prices drop to $20 per barrel, the Organization of the Petroleum Exporting Countries (OPEC) will not reduce its production. Following this, reports emerged on Sunday regarding 'Tehran's warning to Riyadh' about oil prices. Despite the drop in oil prices, OPEC decided last month to maintain its production ceiling at 30 million barrels per day. Oil prices have lost half their value since June due to oversupply, declining global demand, and rising dollar rates. Regarding Iran's defense budget, Mr. Nobakht continued, 'What we see from oil resources in the budget is 71 trillion tomans... and if the price of oil falls below these numbers, say to $34 or $35, we will easily manage the problem.' He added, 'Currently, we have paid 100% of provincial development credits and 68% of the total development credits of the country in the 2015 budget, so if no revenue is generated, we can manage the country through allocation management.' According to a report from the state news agency IRNA, oil revenues constitute 33% of the 2016 budget, while this figure was 50% for the current year. Mr. Nobakht also mentioned that in the 2016 budget bill, the defense budget is considered to be 'within limits,' and the government would be pleased if the parliament strengthens the sections it deems necessary. The budget for the Joint Staff of the Islamic Revolutionary Guard Corps in the 2016 budget bill has increased by more than 5.8 trillion tomans, reaching 17.289 trillion tomans. Additionally, the total budget for the Ministry of Defense, Joint Staff of the Army, Joint Staff of the IRGC, Basij, and the General Command of the Armed Forces of the Islamic Republic of Iran for the coming year is set at 28.167 trillion tomans, compared to 21.217 trillion tomans in the current year's budget. The budget proposed by the government will first be reviewed in the Joint Commission of the Islamic Consultative Assembly and after amendments, it will be presented to the public session, where there is the possibility of increasing or decreasing the proposed figures at both stages.