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Iran Admits: Tanking Oil Revenue Cripples Country

Tsvetana Paraskova

In contrast to previously defiant statements that Iran will withstand any sanctions of its ‘enemies’, Iranian President Hassan Rouhani admitted on Tuesday that it is now very difficult to run the country with severely crippled oil revenues.

“Although we have some other incomes, the only revenue that can keep the country going is the oil money,” Radio Farda quoted Rouhani as saying, when he commented on the reduced oil revenues because of the U.S. sanctions on its oil industry and exports.  

“We have never had so many problems in selling oil. We never had so many problems in keeping our oil tanker fleet sailing,” Rouhani said in a speech during a visit to the city of Kerman in southeast Iran.

“How can we run the affairs of the country when we have problems with selling our oil?” Rouhani added, as carried by Radio Farda.

In an English translation of his speech at the official website of the president of the Islamic Republic, Rouhani was quoted as saying:  

“We all know that our country is not in normal conditions. A person who is not familiar with budget and economy may say that not selling oil is not very important, but the truth is that these great God-given resources are here for us to use.”

Iran will also have difficulties in restoring production at oil wells once the current sanctions are lifted, Rouhani said, noting that Iran spent US$800 million to reactivate oil wells to production after the previous sanctions were lifted in early 2016.

The admission that crippled oil revenues—which was the primary purpose of the U.S. when it slapped sanctions on Iran’s oil—hurt Iran’s economy and state budget comes just days after Rouhani announced Iran had discovered a new oil field with reserves estimated at more than 50 billion barrels—a figure that the energy minister later walked back to 22 billion barrels, 2.2 billion of which is thought to be recoverable.  

By Tsvetana Paraskova for Oilprice.com

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