Iran expects more of its oil barrels on the market as domestic market is positioned well, even with lower crude oil prices, liaison to OPEC says. File photo by Maryam Rahmanian/UPI |
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TEHRAN, Dec. 30 (UPI) -- Pointing to low production costs, Iran's director for OPEC affairs said the economy will grow with exports even in a weakened oil market climate.
Iran is expected to add more crude oil to the global market and bring in more foreign investors to an energy sector restricted by economic sanctions imposed because of a controversial nuclear program. Iran, the five permanent members of the U.N. Security Council, plus Germany, reached a breakthrough nuclear agreement in July that would offer sanctions relief for Tehran.
Total production from Iran is holding steady at around 2.85 million barrels per day from the 2013 average of 2.67 million bpd. Most major producers are expecting a decline in oil production because of lower crude oil prices. Mehdi Assali, the director of affairs Organization of Petroleum Exporting Country affairs at the Iranian Oil Ministry, said that, with production costs of around $10 per barrel, Iran stands in a unique position.
"Oil prices will fluctuate between $35 and $50 per barrel in the coming years and there will be no worries regarding Iran's oil income," he said.
Assali said the economy will grow by as much as 5 percent during the next Iranian calendar year, which begins March 21, as more of its oil enters the market.
In its review of the Iranian economy, the International Monetary Fund said lower crude oil prices were taking a toll. Real growth in gross domestic product is expected to decline from 3 percent to somewhere between 0.5 percent and -0.5 percent in the coming year, according to the IMF.
Iran emerged from economic recession one year ago, though the IMF said unemployment is high, as is the cost of doing business. For Iran to become and top emerging economy, "comprehensive" reforms are necessary, the IMF said.
