Iran able to produce oil at $1 per barrel

TEHRAN, Dec. 14 (MNA) – Announcing that Iran can produce oil at 1 to 1.5 dollars per barrel, ICOFC’s managing director said the global market won’t let oil prices remain low for a long time.

Directing Manager of Iran's Central Oil Fields Company (ICOFC) Salbali Karimi said Iran enjoys one of the lowest levels of oil production costs in the world adding “the least expensive crude oil in terms of low cost of production is currently being produced in the central areas of the country.”

“In a number of oil fields, the cost of producing one barrel of crude oil is 1 to 1.5 dollars,” he noted.

The official recalled that despite low production costs, several measures are being taken to optimize the costs of producing oil and gas; “accordingly, it is anticipated that oil and gas production costs will reduce to a minimum once the ongoing projects are implemented.”

He also explained the impact of crude oil price fluctuations on projects to increase oil and gas production in central areas and southern Zagros of Iran stressing “experience has shown that the oil prices are always faced with ups and downs in a way that an oil shock has occured every 7 to 10 years since 1973.”

Karimi said that in 1979, coinciding with Iran’s Islamic Revolution, as well as during Saddam’s anti-Iran war of 1980s, fluctuations have been noticed in oil prices; “however, the prices followed a rising trend after these incidents until 1997 when they reached the range of 60 dollars a barrel.”

Pointing to the economic crisis of 2008 leading to the volatility of oil prices, ICOFC official said “the cause is that oil is not a commodity and many factors are involved in its purchase due to having influence on all security, economic and political areas, which imposes the maximum risk on oil prices.”

“The oil and energy market cannot last long with low prices,” maintained Karimi concluding “crude oil has an optimal price at which costs and benefits for investors, producers and consumers are reasonable; therefore, sudden changes in the economy section need to be prevented in order to avoid ambiguities for the consumer and the producer.”

 

HA/2999010

 

News Code 112794

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