Iran says it spends less than $10 for production of each barrel of crude oil, stressing that it expects such low production costs to encourage foreign investors to flock to its oil industry in face of plunging market prices.
Mehdi Assali, Iran’s national representative to the Organization of Petroleum Exporting Countries (OPEC), has been quoted by the media as saying that Iran has no concerns over the falling prices given that even oil at $30 per barrel will push up the country’s economic growth by around five percent in 2016.
This, Assali said, is because Iran will double its current oil production next year after the removal of the sanctions.
He further said that OPEC member states still need a strong political will to reduce their supplies and give way to the incoming Iranian extra supplies. Their failure to do so, the Iranian envoy warned, will lead to further plunges in the prices, IRNA has quoted the Iranian envoy as saying.
Assali further said that Iran expects the prices of oil to remain between $35 to $50 in 2016. However, he stressed that the prices will not go anywhere above $60 in the next four years.
Iran has already emphasized that it will increase its oil production by 500,000 barrels per day (bpd) as soon as the sanctions against the country are lifted.
It says a further increase of 500,000 bpd could take place within a matter of months.
Iran’s production of oil stands at around 2 million barrels per day of which it can only export about 1 million barrels based on the current regime of sanctions.
Based on a nuclear deal that Iran agreed on with the P5+1 group of countries – the five permanent members of the Security Council plus Germany – back in July, Iran will restrict certain aspects of its nuclear energy activities in return for the removal of certain economic sanctions.
A key part of the sanctions that are expected to be removed are those that prevent foreign investment in Iran’s oil industry and also limit Iran’s oil exports.