Iran and Algeria have endured tough times due to the downturn in global oil market, but "the difficult spell of low prices is going to pass".
Oil Minister Bijan Namdar Zanganeh made the statement in a meeting with Algeria's Minister of Industry and Mines Abdessalem Bouchouareb who was on a visit to Tehran on May 16-17 at the head of a large economic and trade delegation, Mehr News Agency reported.
Zanganeh noted that Tehran and Algiers have faced a similar situation in economic crises and hardships, but have always strongly supported each other.
"As it appears, we are weathering the storm and this will accelerate bilateral economic ties," he said.
He added that the two sides have strengthened relations over the past few years on multiple occasions, such as Algerian Prime Minister Abdelmalek Sellal's visit to Tehran in November for the third summit of the Gas Exporting Countries Forum.
Oil and gas sales make up around 95% of Algeria's exports and account for nearly two-thirds of the country's budget. The North African nation posted a dismal $13.7 billion deficit in 2015 after a $4.3 billion surplus in 2014.
Iran has also been hit hard by the loss of value of its most prized commodity. According to official reports, the government ran into a $12.8 billion deficit in the previous Iranian year that ended March 19.
Oil traded at above $100 per barrel in mid-2014, but crashed to multiyear lows in January before recovering to $45 per barrel in recent weeks.
Prices rose to new 2016 highs on Monday, as production outages in the US, Canada and Nigeria, among other places, have partially offset the oversupply.
Iran is the third-largest producer of the Organization of Petroleum Exporting Countries and Algeria is the ninth largest.
The Persian Gulf country has consistently ramped up production after reaching a historic accord with six world powers in July over its nuclear program. It is now pumping more than 3.5 million barrels per day, up from 2.5 million bpd during the sanctions.
Algeria is pursuing a bigger market share, having plans to raise crude output by 5% in 2016 and offer energy-exploration rights to foreign companies. It operated 55 oil rigs and pumped 1.1 million barrels a day last month. Its production has changed since 2013.
The country is also Africa’s biggest natural gas producer and Iran's ambition to produce more than 1 billion cubic meters of gas per day by 2020 is another ground to bring the two sides closer.
Oil-Driven Investments
Iran is planning to allocate more than $200 million to invest in the infrastructures of its oil producing cities that are mostly located in the south, Zanganeh said in a conference on Oil Ministry's corporate social responsibility on Tuesday.
The budget allocated to develop construction projects in oil producing regions last year stood at around $110 million, which has risen to more than $200 million for the current Iranian year ending March 20, 2017.
The parliament is set to vote on a bill that will obligate the government to earmark a fraction of its revenues from crude oil and gas exports for the development of economic and energy infrastructures and less-developed areas.
The proposed legislation targets 3% of the government's total oil and gas revenues by reinvesting 1% of the sum in oil and gas producing cities based on their production level and 2% in construction projects in deprived and disadvantaged areas.
Despite the sharp fall of oil price, the black gold is still the most important commodity for the Persian Gulf country, making up around 25% of its total revenues in the current budget.
