Iran Bases 2016-2017 Budget on Oil Price of $40

Iranian Petroleum Minister Bijan Zangeneh said the Iran 2016-2017 budget assumes an average oil price of $40 dollars per barrel.

MOSCOW (Sputnik) — According to Zangeneh, the crude oil price assumption was calculated to be as realistic as possible, with volatility in the oil market expected to continue into next year.

"There have been efforts to suggest in the budget the closest and most possible price for oil, though the market is usually in fluctuations," Zangeneh was quoted as saying by the local IRNA news agency.

The petroleum minister also underscored that the government did not intend to liberalize the price for petroleum products.

On December 4, an OPEC summit closed in Vienna with no changes to the organization's 30-million-barrel daily production quota. OPEC Secretary General Abdalla Salem Badri cited the uncertainty over Iran's expected output as a major factor preventing a decision from being taken. Iran is expected to ramp up its production once international sanctions are lifted from the country.

OPEC will also continue to exceed its 30 million barrels a day target, according to the organization. The excess persists despite October's production cut of 256,000 barrels per day.

Brent crude prices plunged from $115 per barrel to $48.50 per barrel between June 2014 and January 2015. Prices did not exceed $67 per barrel throughout 2015, mostly hovering around $55 per barrel.