Iran today: The oil challenge

A file photo showing gas flare of an Iranain oil production platform

One line in a Reuters article on the global oil market stands out:
“Tehran needs an oil price of $140 [per barrel] in 2013 to balance the books, according to the International Monetary Fund.”

The significance? The price has just fallen before the $100 mark again. Even at its high point this year — $119 in February — it is far short of the return needed by Iran to finance Government expenditure.

And the Islamic Republic, when it can sell oil amid US-led sanctions, is not getting the posted price. Iran is giving discounts, especially leading customer China, both in open trade and in deals which are “off the backs”. Indeed, sources have said that, in order to get some return and to free up storage space, Tehran is moving oil at prices as low as $20 to $30 per barrel.

All of this highlights the economic challenge for President-elect Hassan Rouhani and, behind him, the Supreme Leader. Iran’s oil exports have been halved in the past year, and Washington and its European allies are offering no sign of an easing of sanctions — instead, the US Government imposed four new sets of measures just before Rouhani’s victory.

So, beyond his promise of better “management” in contrast to the Ahmadinejad administration, what can Rouhani and his team do?

Supreme Leader Sets Out Real Meaning of Presidential Election

In a series of Twitter messages, following Ayatollah Khamenei’s meeting with judiciary officials, the Supreme Leader’s office sets out the real meaning of this month’s Presidential election (hint: it’s not the victory of Hassan Rouhani):

What occurred in #IranElection 2013 was totally against enemy’s plans.#Iranians did a great job, acted deftly in confronting enemies

— khamenei.ir (@khamenei_ir) June 26, 2013

 

In this #election God guided people’s hearts and indeed a real epic was created | #Iran

— khamenei.ir (@khamenei_ir) June 26, 2013

 

The Supreme Leader did ask everyone to assist the President-elect and also put out some soothing words for Mahmoud Ahmadinejad, “The outgoing Government has…many strngths. It would be great to mention the Government’s economic efforts along with its problems. That would be fair.”

By Enduring America

 

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