Iran’s budget for the present year (started March 20, 2020) has been prepared on expectations of selling one million barrels per day (bpd) of oil at an average price of $50 but the coronavirus pandemic put the global prices on an unprecedented downward trend with OPEC prices less than $20.
At the first glance, dealing with a lethal outbreak under the draconian US sanctions, Iran seems to be more economically vulnerable than ever, with the prediction of the budget deficit. However, experts describe the country’s economy as resistant to global market fluctuations and almost independent of oil sale revenues.
In an interview with Mehr News, Iranian ex-lawmaker and senior expert in energy sector Dr. Hassan Moradi shed light on various oil market-related issues under Covid-19 pandemic.
'Iran’s budget least oil-reliant one in history'
“The current budget plan is the most oil-independent one in history, although it eyes $50 for each barrel of oil,” he noted.
“As a matter of fact, the coronavirus made Iran face an unpredictable situation and the country is obliged to supply its financial requirements from other resources than oil sale income,” he added.
“Its non-oil exports sector, which registered a growth in the past year, is a good option for Iran to be focused on more than ever,” the Tehran University professor noted adding that exports of non-oil goods can compensate for the oil revenues downfall.
“For example, exports of detergents, sanitizers, and disinfectants, as well as toilet paper and other similar products, can be a good chance for us.”
“European markets have now a thirst for such productions and can be a lucrative market for us, as are our neighboring countries. Iran has also a big hand in manufacturing coronavirus test kits. Iranians knowledge-based countries are capable of exporting their products to the world,” he added.
'Iran still key role-player in OPEC'
Moradi regarded Iran’s role in OPEC as significant and influential.
“Iran is a founder of OPEC with a key role in the body’s decisions over the year,” he underscored.
“Iran has always had a comparatively high bargaining position and persuasion power in the international body and its international dignity has never been negatively influenced by the volume of its oil sales under the US sanctions.”
'Coronavirus raises alarm for oil consumers, too'
Mordai considered both producers and consumers as the losers under the outbreak.
“In my view, all the oil consuming countries across the globe must be aware that oil exploration and extraction sector is incurring losses under the coronavirus outbreak.”
“Presently, no investments are made on oil production sector and production chain is damaged globally.”
“This is a threat to the future of global oil consumption. In case, the current conditions continue, consumers will also be negatively influenced,” he warned.
He also considered some political aspects of the issue. “For sure, major oil consumers of the world are enjoying the plummeted oil prices,” he said, “However, some consumers are concerned about their allied producers. For example, China has Iran as its major partner and does not want the Iranian economy to face challenges due to oil prices fall.”
'OPEC needs to talk S. Arabia out of individualism'
Elaborating on the impact of the lethal virus outbreak on the international oil market, the energy expert said: “Before the coronavirus outbreak, prices were experiencing a level of stability. The coronavirus turmoiled the international oil market, pushing down the price to their lowest in the past 20 years. The virus put the OPEC, OPEC plus and non-OPEC countries into a predicament, in a way that some say 50 million jobs are lost across the world just due to the oil prices downfall.”
Being asked about the US stance towards the prices fall, he described: “It is not economical for the US to produce shale oil while international prices are less than $40, i.e. despite its low oil resources, the US will also incur losses from the current low prices. The country needs to keep prices hovering around its desired level. Therefore, the US is standing in the same line as the OPEC and OPEC plus and will join the upcoming webinar to play a role in the market and in the hope for bringing back a level of stability to it.”
He named Saudi Arabia as a main player with a negative role in the international oil market, underlining that in its upcoming extraordinary virtual meeting, OPEC needs to talk Saudi Arabia out of its individualism.
“I hope the participants of the webinar would be able to convince Saudi Arabia for an output cut, while the country’s production level has increased to a record of more than 12 million barrels per day and it has offered unbelievable discounts to its oil customers, despite a plunge in demand triggered by Covid-19,” he said.
“Saudi Arabia must stop its unilateralism and individualism in flooding the market. Producers need to pull prices back to more than $40.”
'Coronavirus a biological weapon'
The total number of coronavirus infections since its outbreak by April 6. has increased to 1,274,214. According to the latest reports, the virus has killed 69,468 and 264,833 have recovered from it. Some 208 countries and territories around the world and two international conveyances have been reporting cases of infection since then.
There are different assumptions about if COVID-19 is biological warfare. Some believe it is US biological warfare attack on China, some others name it as 'accidental biological warfare' and some have other assumptions.
Answering a question on his personal idea about the spread of the deadly novel coronavirus as a biological weapon, he explained that “this may not be an incorrect supposition if we consider the coronavirus as a biological weapon. The probability is high that the virus is a human-made one, created in US laboratories which are located in different countries.”
“What are the US laboratories doing in other countries and what is their set target if they are not creating biological weapons?” he asked.
Interview by Haniyeh Sadat Jafariyeh
02:58 - 2020/04/07
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