Plunging oil prices will trigger inflation and a mounting budget deficit for the Iranian regime, a member of the regime’s parliament has warned.
Hadi Qavami, a member of the Plan and Budget Commission, told the IRNA news agency that a fall in oil prices would also devalue the national currency and cause a drop in hard currency reserves.
His comments come after the International Energy Agency said last week that the price of Brent crude was not now expected to rise above its four-year low of $80 a barrel for at least 12 months.
The IEA said: “While there has been some speculation that the high cost of unconventional oil production might set a new equilibrium for Brent prices in the $80 to $90 range, supply/demand balances suggest that the price rout has yet to run its course.”
Barring any new supply disruption, ‘downward price pressures could build further in the first half of 2015’, it said.
In Iran, the state-run Ebtekar daily newspaper said on on November 8 that the regime’s budget deficit was $1.5 billion – but economists now believe the true figure is much higher.
The Tehran government had calculated its budget for 2014 based on oil priced at $100 per barrel and oil exports of around 300,000 barrels per day.
