With global oil prices holding below $40 per barrel in recent weeks, Iran, which relies on oil export revenues for a large portion of its annual budget, recently announced it would use $37.50 as the price per barrel for next year's budget, Xinhua news agency reported.

"The government and the parliament have agreed on setting an oil price of $37.50 a barrel in the next year's budget bill. ... This price has been set in view of the oil market fluctuations. We should also be careful not to lose our main customers," said Iran's Oil Minister Gholam-Hossein Nozari.

Because of the low oil prices, it is expected that Iran will not be able to move forward on many of its economic development plans. Crude oil provides about 80 percent of Iran's revenues. That is one of the reasons Iran has been so adamant about the Organization of Petroleum Exporting Countries cutting production to bring oil prices back up.

Since his 2005 election, Iranian President Mahmoud Ahmadinejad has said he wants to reduce the nation's dependence on oil for revenue. But as the Oil Ministry made the announcement, Ahmadinejad continued to dismiss the idea that falling oil prices will impact the country's economy.

"Even if they reach $5 a barrel, the country's economy will not be affected," he said.

Natural gas involved in Israeli strikes

One of the reasons speculated by some to be behind Israel's interest in the land on the Gaza coast is the supply of natural gas there, The Times of India reported.

In 1999, BG International, a large oil firm, found large deposits of natural gas in Gaza, a small strip of land on the Mediterranean Sea. The Gaza Marine gas field is estimated to hold about 1.2 trillion cubic feet of gas worth more than $4 billion, and Israel got a good deal from BG on the field at the time.

But since Hamas took control of Gaza, it has been trying to renegotiate that natural gas deal and Israel has been unable to exploit those valuable resources.

That unexpected and potentially lucrative find could provide Israel with energy security. The country is heavily reliant on imports, which over the past year became extremely expensive, though prices have fallen since the summer.

The reserves could meet 25 percent of Israel's energy needs if they could regain control of the fields.

Another Nigerian pipeline attacked

Nigeria's Agip pipeline was blown up over the weekend, the latest in a long list of violent acts in Nigeria's oil-rich Delta region, Vanguard reported.

The pipeline, owned and operated by the Nigerian Agip Oil Co., transports crude oil from production platforms in Burutu to an oil flow station belonging to NAOC. The station was temporarily shut down following the blast.

In addition, gunmen hijacked an oil services vessel owned by French company Bourbon off Nigeria's Niger Delta. According to early reports, the vessel was headed to a Royal Dutch Shell offshore oil field.

Fighting in Nigeria's Delta region has deterred and disrupted development of the area's oil and natural gas resources. The Movement for the Emancipation of the Niger Delta has been behind much of the violence in the region but already has said it is not behind these latest attacks.

''Although MEND is not involved in this attack in any way, we still support such actions from communities that watch their wealth flow away from right under their nose without anything to show for it,'' the militant group said in a statement. ''MEND will surely partner with such youths and communities in the execution of future attacks by providing training and more powerful explosives after the cease-fire is called off."

MEND has previously threatened to call off the cease-fire declared in September if the Nigerian government does not allow incarcerated MEND leader Henry Okah medical treatment abroad.

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Closing oil prices, Jan. 5, 3 p.m., London

Brent Crude oil: $43.37

West Texas Intermediate crude oil: $42.91

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(e-mail: energy@upi.com)