Iran aims for more diverse economy

Iranian speaker of parliament said economy buffered somewhat from lower crude oil prices.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Feb. 8, 2016 at 8:24 AM
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QOM, Iran, Feb. 8 (UPI) -- Iranian exports of around $50 billion worth of non-petroleum products are not enough to diversify the nation's economy, the speaker of parliament said.

"There are many countries that were disturbed by plummeting oil prices, but Iran was not affected much," Speaker Ali Larijani said from the holy city of Qom.

Iranian President Hassan Rouhani wrapped up a tour of European nations last week after sanctions pressures eased in response to the January implementation of a multilateral nuclear agreement. With the oil minister in tow, Iran said it was drawing renewed interest from energy companies like French supermajor Total and Italian giant Eni.

Though sanctions relief means more Iranian oil on the market, the Iranian government has tried to make its economy less dependent on oil for revenue. Rouhani was on hand during the signing of a deal with Airbus for the delivery of 118 new aircraft for Iran Air. Auto company Renault, for its part, reaffirmed its commitment to the Iranian market during the president's visit to France.

Larijani said the economy exports around $50 billion worth of non-petroleum products, "which is not sufficient."

Crude oil prices are down about 70 percent from mid-2014, leaving the economies of major producers from Saudi Arabia to Russia feeling the pressure. Moody's Investor's Service last week said the Iranian economy is more diverse than other oil exporters in the region. Working under the pressure of Western economic sanctions meant Iran had to retool its economy and adapt to lower oil revenues before crude oil prices started their swift decline from $100 per barrel.

"Most other oil-dependent sovereigns are only just beginning to consider structural fiscal reform," Atsi Sheth, an associate director with Moody's, said in a statement from Singapore.

Rumors have circulated since late January that OPEC and non-member states may be considering production cuts to drive up the price of oil. Pointing to rivals in Riyadh, Larijani said Saudi Arabia's robust production policy was harmful only to themselves.

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