Iran’s President Hassan Rouhani says certain major oil producers collaborated with world powers to put Iran and Russia under pressure by taking measures to bring down the prices of oil.
“During the days [that Iran was under the pressure of the sanctions], some big producers of oil that are dependent on world powers decided to reduce the price of oil from $110 per barrel to $40 per barrel to undermine Iran and recently even Russia,” Rouhani has been quoted by the media as saying.
The president did not name any country but chances are that he was referring to Saudi Arabia which is largely blamed for the free-fall of oil prices over the past year.
During a crucial meeting of the Organization of Petroleum Exporting Countries (OPEC) last November, Saudi Arabia pushed the Organization to maintain its production despite calls by Iran and others to reduce output and help boost prices.
This led to further plunges in prices that had almost halved from highs of above $110 per barrel within only a few months.
The prices are presently below $50 per barrel and analysts fear they could go down further.
Oil revenues provide the lifeline of the Iranian economy and officials have already acknowledged that falling prices have severely undermined the country’s economic performance.
“During the period of sanctions, Iran was confronted in the area of oil in two phases. First, it was forced [through sanctions] to limit its oil sales to 1 million barrels per day (bpd). Second, it was denied access to the petrodollars that the clients had deposited with international banks,” Rouhani said in his speech to local summit.
“But in a post-sanctions era, it will be Iran that will decide how much oil it will produce, in which market it will sell its oil, in which bank it will deposit the revenues thus obtained, and how it will use those revenues,” said the president.
The US-engineered sanctions against Iran – already described as the toughest in history – also prevented foreign companies from making crucial investments that the country needed to maintain or raise its oil and gas production.
Rouhani’s economic team, however, has managed to win the praise of industrialists and others at home for taking measures that enabled the country to first stop a drop in its oil and gas production – caused largely as a result of sanctions on new investments – and then even led to increases in the output of certain key fields.
“Today that we want to re-open some of the fields that were shut down [as the result of sanctions on Iran’s production level], we need to suffer huge costs,” Rouhani added. “Of course, this is a problem that is related to the government and we have made the adequate planning to solve it”.
Iran’s Oil Minister Bijan Zangeneh – who has won a major credit at home for the success of his team in increasing the country's collective oil and gas production – says he has already told OPEC to make room for the incoming Iranian oil.
He says Tehran is determined to regain the oil market share it lost as a result of the sanctions, emphasizing that his team stands ready to implement measures to increase Iran’s oil production capacity by 500,000 bpd as soon as the sanctions against Iran are lifted.
The removal of anti-Iran sanctions – expected to take place in the first half of 2016 – has been stipulated in a nuclear breakthrough made by Iran and the P5+1 in Vienna in July.