Decline in oil prices is temporary and prices will be regulated in the long-term, director of the strategic planning at the oil ministry said, ISNA reported.
“Fluctuations in crude prices are not presently threatening or shocking to Iran,” Saeed Ghavampour said.
The latest developments in the global oil market are “complicated and unnatural” and the market is presumably controlled by “invisible hands,” he said without elaboration.
Oil prices had been relatively stable for nearly four years, averaging $110 per barrel. Increased production in the US, Canada, Iraq and elsewhere made up for the declining supplies by nations such as Iran and Libya, and helped meet the rising global demand.
However, Brent crude fell from $115.71 a barrel on June 19 to $82.60 a barrel mid-October, the lowest price in almost four years.
Ghavampour underlined political movements in the region, collaboration with the United States, and increased extraction of the US from its shale oil reserves as major reasons behind upheavals in the international oil market and said, "Further information is needed to analyze the future of this competitive market."
It would be unlikely that oil prices drop below $80 per barrel, because it will then not be economical for the US to continue drawing from its reserves. He added that prices could fall as low as $50, but this will be transient. "Collusion between Saudi Arabia and the US on oil prices is aimed at mounting pressure on Russia. Thus, it's likely that price cuts are artificial. But it can be said that such fluctuations do not pose a threat to the country."
Price cuts are geared towards creating expectations for cheap oil among buyers in the long run. However, this would even be to the detriment of the US, as the owner of the largest unconventional oil reserves in the world which is estimated at 1.5–2.6 trillion barrels.
Deputy oil minister Mansour Moazzami had earlier asserted that oil price cuts "are not temporary, but rather a planned policy that will continue for some time.
Despite Moazzami's assertion, chief executive of Saudi Basic Industries Corp Mohamed al-Mady claimed that the recent decline in global oil prices is temporary even if it lasts a year or so, since population growth will ultimately lead to higher consumption and prices.
