The parliament cut the government's oil export forecast in the next fiscal budget from 2.3 million to 1.5 million barrels a day, head of the energy committee of the Majlis Budget Integration Commission said.
"The proposed 2.3 million-barrel ceiling was unrealistic and unlikely to be realized ... In the best-case scenario, the commission came to the conclusion that the National Iranian Oil Company will be able to export 1.5 million barrels," Malek Shariati-Niasar was quoted as saying by ISNA.
Income from selling 2.3 million barrels of crude a day in the domestic and international markets ($9 billion) is forecast in the 2021-2022 budget. However, the target has been questioned by economic experts due to the US economic siege and the extent to which Covid-19 continues to hammer international oil demand. Both factors restricted Iran's oil export to below 250,000 bpd last year.
“The budget integration commission -- which is in charge of finalizing the proposed budget – is of the opinion that the [high oil export] goal was unattainable.”
The commission concluded that the government can only count on only one million barrels of oil. But it has given the government authority to sell up to 1.5 million bpd (if it can), Shariati-Niasar said. “The oil export price forecast of the government was unchanged at $40/b.”
The share of oil in the budget has become a major contentious issue in the corridors of political and economic power in the past few weeks.
Normally it is difficult to gauge oil revenues when drafting budgets in oil exporting countries. At this juncture even optimistic analysts in Tehran cannot imagine exporting 2.3 million barrels of crude oil a day from March.
There is no denying that oil and gas production is key to Iran’s economic growth and stability. Yet, what has been forecast in the new budget is unwarranted.
