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| Iran’s oil plunges below $30 | ||
| 2015-12-27 | ||
| Iran’s media reported on Saturday that the price of the country’s heavy crude oil had plunged to below $30 per barrel for the first time in almost 20 years, Press TV reported. Shana news agency – affiliated to Iran’s Oil Ministry – said in a report that the country had sold heavy crude at $29.4 per barrel. The price had been registered in the week ending 18 December. The report added that Iran had also sold its light crude at $35.1 per barrel over the same period. Both figures show major drops from normal levels of the previous months. The average price of Iran’s heavy oil stood at $48.6 since March, added Shana. The average price of the light oil stood at $50.6. Iran last saw record low prices in 1998 when its oil was traded in markets at below $10 per barrel.
“Oil producing countries will suffer serious blows under the current conditions and with [further] plunges in prices of this product (oil),” said Iran’s First Vice President Es’haq Jahangiri on 19 December. For a country that has devised its budget based on $100 for each barrel it expects to sell, it will be hard to change the calculations to $30 per barrel, Jahangiri added. Nevertheless, the country’s Finance Minister Ali Tayyeb-Niya later emphasized that Iran had provided the required preparations to deal with the economic impacts of oil prices even as low as $30 per barrel. Tayyeb-Niya said a large part of those preparations focuses on the implementation of a comprehensive national taxation program which is already on the agenda of the government.
“Considering that the costs for the production of oil in Iran are low, further drops in oil prices will not undermine Iran’s oil export plans,” said Rokneddin Javadi, the managing director of the National Iranian Oil Company (NIOC). Javadi emphasized that Iran is still eager to regain the oil market share it has lost as a result of the US-engineered sanctions against the country. Nevertheless, he warned that OPEC’s failure to devise an appropriate policy to accommodate the incoming Iranian oil supplies will push the prices to even lower levels. “OPEC member states should keep their output within the quotas that have already been defined,” said Javadi. “We are ready to increase Iran’s total oil production by 500,000 barrels per day within a week after the removal of the sanctions,” he has been quoted as saying by IRNA news agency. Iran’s oil production, the official added, will rise to above 2 million bpd in less than six months afterwards. | ||
| Posted by:Steve White |
| #5 "Popcorn, anyone?" I'll order an extra boxcar-load, #1 Mike. :-D |
| Posted by: Barbara 2015-12-27 18:40 |
| #4 According to this Yahoo Finance article from October, Iran's production costs currently average $15/barrel. The break-even cost to open a new field would be $30/bbl once sanctions are removed. The problem is, the best price at which to run the country and foreign ventures as the Mad Mullahs would like is about $136/bbl, as I understand it -- the $100/bbl budget mentioned in the article was from the revised budget when the price dropped from peak (input from those who know more about this would be greatly appreciated!). The government will no doubt raise domestic oil and natural gas prices again, also no doubt to a chorus of dismayed shrieks from the populace, but that will just be moving spending from one category to another. |
| Posted by: trailing wife 2015-12-27 15:50 |
| #3 Meh who cares, money from |
| Posted by: Pappy 2015-12-27 12:21 |
| #2 Meh who cares, money from home on the way. |
| Posted by: Shipman 2015-12-27 10:37 |
| #1 ...Given the Inshallah attitude of Iranian technology, you gotta believe that under $30 means they're losing money on every barrel. Popcorn, anyone? Mike |
| Posted by: Mike Kozlowski 2015-12-27 10:30 |