Iran has said the Organisation of Petroleum Exporting Countries should take action to stabilise oil prices. Expectations of weaker energy demand has pushed prices to fall below $60 a barrel for the first time since March 2007.
Gholamhossein Nozari, Iran's oil minister, said that the stability of prices "needed a far reaching decision and further measures," after prices fell from a peak of $147 in July. "We are going to review oil market conditions and if there is a need, there might be an emergency meeting," he said on Tuesday.
Iran depends heavily on oil sales, earning 80 per cent of its revenue from oil exports, and the Islamic Republic set its annual budget on the assumption that oil would trade at $90 a barrel.
After cutting oil production by 1.5m bpd in October, an Opec source said on Tuesday the group may cut oil supplies by a further one million barrels per day (bpd) when it meets in Algeria in December.
Iran, the world's fourth-largest oil producer, has already cut about 200,000 bpd from an output of around 4.04m bpd in line with Opec's October agreement, an Iranian oil official said on Friday.
Elahe Mohtasham, an Iranian analyst at the Foreign Policy Centre in London, told Al Jazeera: "In 2000, Iran established an oil stabilisation fund for rainy days like today where oil prices have dropped. The oil reserve fund's purpose was to keep a surplus, and was obtained in times when oil prices were high, back in July for example.
"But apart from mismanagement ... there is an ideological economic policy behind some of the advisers of President Ahmadinejad. If there were better policies in place, we wouldn't be in such a mess today."
| And it's going to get worse, since oil could easily go to $40 a barrel. That means Iran would be earning less than half it planned to earn. Going to be hard for the Mad Mullahs™ to keep the population in line if they don't have cash to spread around to the Revolutionary Guards. |
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