Iran Can Survive With Oil at $5 a Barrel, Ahmadinejad SaysBy...

Iran Can Survive With Oil at $5 a Barrel, Ahmadinejad Says

By Ladane Nasseri

Nov. 23 (Bloomberg) -- Iran, OPEC’s second-largest crude producer, can survive even with oil prices at $8 or $5 a barrel, President Mahmoud Ahmadinejad said.

“We have in the past managed with oil at $9,� Ahmadinejad was cited as saying by the Islamic Republic News Agency in Tehran today. “Some believe today the decline in oil prices can result in economic crisis in the country, but in the same way that the global financial crisis did not impact Iran’s economy, the fall in oil prices can not have much influence on our nation’s economy.�

Iran, which relies on oil sales for at least half of its budget, is facing decreasing revenue amid the declining oil price. Crude oil settled at $49.93 a barrel on the New York Mercantile Exchange on Nov. 21. Prices have dropped 66 percent since reaching a record $147.27 a barrel on July 11 as growth slows in consuming countries, dampening demand for the fuel.

Iran’s Central Bank warned earlier this month that the country will face with “big trouble� should oil price falls below $60.60 a barrel. Iran will deplete its oil stabilization fund within five months if oil drops to $60 a barrel, the bank said.

Ahmadinejad has been criticized by local economists and analysts for tapping the fund to pay for the government’s expansion programs and for failing to decreased the country’s dependence on oil revenue.

The Organization of Petroleum Exporting Counties is due to meet in Cairo on Nov. 29 and again in Algeria on Dec. 17 after its decision last month to slash production by 1.5 million barrels a day failed to stop oil prices crashing to below $50 a barrel in New York.

To contact the reporter on this story: Ladane Nasseri in Tehran at [email protected].
Last Updated: November 23, 2008 07:02 EST