Iran will restructure its budget in a way that should reduce the country’s dependence on oil revenues to zero, a senior government official told Mehr news agency.
“Given the difficult times of sanctions, we will be losing a considerable amount of budget resources; therefore, it is necessary to make sure that the reforms in the budget structure for the next year will be able to cut down direct dependency on oil revenues to zero,” Mohammad-Bagher Nobakht, the head of Iran’s Plan and Budget Organization, said.
The
official also admitted the government would need to restructure its budget to
reduce oil’s weight in it even without sanctions.
The head of the energy commission at Iran’s Chamber of
Commerce commented, as quoted by the Financial
Tribune that "It is regrettable that the country has continued to repeat the same mistake
for the last seven decades. Instead of squandering oil revenues on current
expenditure, it should be invested in infrastructures."
In the latest budget approved by the Iranian government last
December, revenues from oil exports were calculated at US$21 billion. This would constitute a third of
the budget for the 2019/2020 financial year that started this March. A third is
not an overwhelming portion of the budget that relies on a single commodity.
However, the US$21-billion figure was possibly too optimistic.
The figure assumed an average price for Iranian oil of between
US$50-54 a barrel. That’s cautious enough but it also assumed average
daily exports of 1-1.5 million barrels.
After the removal of sanction waivers for Iran’s largest oil buyers, most
sources agree that Iran is exporting a lot less than that.
Estimates of Iranian exports vary, with Reuters pegging the July average at as little
as 100,000 bpd, based on information from an unnamed industry source and tanker
data. According to one energy analyst who Reuters also quoted at the end of
July, Iran had capacity to only export 225,000-350,000 bpd during last month.
TankerTrackers.com, however, has calculated Iran’s exports of
crude oil and condensates for July at 700,000 bpd, co-founder Samir Madani told
Oilprice, noting the figure was the result of two audits. Madani also said the
lowest export level was recorded in May, at some 500,000 bpd.