TEHRAN, Dec. 12 (UPI) -- Oil needs to be priced at about $125 per barrel in order for Iran to end the calendar year without a budget deficit, an Iranian economist said Friday.
Oil prices have shed more than 40 percent of their June value, trading Friday at a five-year low at $62.69 for Brent, the global price index. In an interview with Shana, the Iranian Oil Ministry's news website, economist Mahmoud Jaamsaz said Iran needs oil at about twice that level to balance its books.
"If the government plans to end the year according to the figures anticipated in the budget and avoid deficit, it should be able to sell oil based on at least $125 per barrel," he said.
Iran is restricted to exports of around 1 million barrels per day according to the terms of a multilateral agreement that offers some sanctions relief in exchange for commitments to curb nuclear research activity.
Iran is out more than $35 billion in oil revenue since it agreed to that plan. Last week, Iranian officials said they were drafting a budget for the fiscal year that begins in March based on $70 per barrel.
Jaamsaz said Iran's economy has been heavily dependent on oil revenue for too long.
"Oil income is a disadvantage for the country because it has been misspent and the incomes have not been followed by economic welfare, social justice and sustainable development," he said.
For fiscal year 2013-14, the World Bank estimates the Iranian economy has contracted at an annual rate of 1.7 percent.
