Iran faces oil revenue problem

By John Defterios, CNN

January 8, 2013 -- Updated 1535 GMT (2335 HKT)

With elections in June, it remains unclear how energy policy will evolve after President Mahmoud Ahmadinejad's era


  • The IEA has suggested Iraq surpassed Iran in output for the first time in over 20 years

  • The Iranian people are faced with spiralling inflation and job layoffs within the state sector

  • Iranian oil revenues in the country plummeted 40 percent, while gas export revenues fell by 45%

Editor's note: John Defterios is CNN's Emerging Markets Editor and anchor of Global Exchange, CNN's prime time business show focused on the emerging and BRIC markets. You can watch it on CNN International at 1600 GMT, Sunday to Thursday.

Abu Dhabi (CNN) -- All indications are that sanctions against Iran are really starting to bite and this time it is coming from the oil ministry in Tehran, which for months has denied that oil production was suffering due to international pressure.

In an interview with the Iranian Student News Agency (ISNA), Gholam Reza Kateb a member of the national planning and budget committee in Parliament referenced a report from Iran's oil minister Rostam Qasemi. In that report, the minister suggested that oil revenues in the country plummeted 40 percent, while gas and gas products' export revenues fell by 45% compared to the same period last year.

Read more: Official: Iran, nuclear watchdog group deal close

This is a hot button issue in Iran, where the currency due to sanctions has dropped 80 percent from its peak in 2011. The Iranian people are faced with spiralling inflation and job layoffs within the state sector.

I spoke with a source in Iran's representative office to OPEC who declined to comment and referred all matters to the Oil Ministry. A spokesman at the state oil company Iran Petroleum would only say "in this political climate it is difficult to confirm these statements."

Read more: Iran steps up uranium enrichment, U.N. report says

Hours later, a spokesman from the Ministry told another Iranian news agency, Mehr, that the numbers quoted about revenue and production drops are not true, although he offered no specific numbers.

Until this report to the Iranian Parliament, Minister Qasemi has maintained that Iran's production was hovering around four million barrels a day, where it was two years ago.

Read more: Opinion: Time to defuse Iranian nuclear issue

Back at the OPEC Seminar in June 2012, the minister told me that sanctions would not have any influence on plans to expand production and investment, shrugging off questions that suggested otherwise. This despite analysis to the contrary from the Paris based International Energy Agency and Vienna based OPEC of which Iran is a member.

The IEA back in July suggested that Iraq surpassed Iran in production for the first time in over two decades and production in Iran dipped to 2.9 million barrels a day. OPEC in its October 2012 survey said it slipped to 2.72 million at the time Minister Qasemi said output remained at 4 million barrels.

Minister Qasemi was recently quoted at a conference in Tehran that Iran needs to invest $400 billion over the next five years to maintain production targets and to play catch up after years of under investment.

Iran is a land full of potential. According to the annual BP Statistical Review, Iran sits on nearly 10 percent of the world's proven reserves at 137 billion barrels. The South Pars field which it shares with Qatar is one of the largest natural gas fields in the world -- but Iran, due to sanctions, cannot expand development.

This is a highly charged period. With elections in mid-June, it remains unclear how energy policy will evolve after the era of President Mahmoud Ahmadinejad passes. It has been eight years of his tough line against Washington, Brussels and other governments that put forth sanctions against Iran. It is not clear if a new President will usher in a new nuclear development policy to ease the pressure on Iran's energy sector and the country's people.

Part of complete coverage on

Indians are genuinely upset. The rise of India's middle class has activated a powerful civil society -- one that's demanding a better government.

January 8, 2013 -- Updated 1904 GMT (0304 HKT)

The radio host who wants Piers Morgan deported for advocating gun control faces off with the CNN host and warns of a new revolution.

CNN reports from Syria and Turkey on the human suffering of those who have survived the civil war, but now face further hardship.

January 8, 2013 -- Updated 1052 GMT (1852 HKT)

The rundown of recommended stories on popular Chinese social media showed nothing extraordinary this week, until users looked more closely.

January 8, 2013 -- Updated 1627 GMT (0027 HKT)

Former Nigerian President says more could be done to reach out to the Islamist group Boko Haram to find out what leads it to carry out acts of violence.

January 7, 2013 -- Updated 1120 GMT (1920 HKT)

Prince Charles on how he feels as a parent as his younger son, Prince Harry, has been deployed to Afghanistan in his role as an Army helicopter pilot.

January 8, 2013 -- Updated 1257 GMT (2057 HKT)

The iShack aims to improve living conditions for people in slums, as it's equipped with a solar panel that can power lights and a phone charger.

To celebrate 150 years of the London Underground, send images and recollections of your most memorable Tube journeys.

January 8, 2013 -- Updated 1501 GMT (2301 HKT)

Great achievements listed in your resume may never be seen by a human, as software vendors bring sophisticated programs to scan resumes.

January 8, 2013 -- Updated 1946 GMT (0346 HKT)

With its 140-character gems, your Twitter feed can be inspiring and even change the way you look at the world ... if you follow the right people.

January 8, 2013 -- Updated 1428 GMT (2228 HKT)

There can't be many people whose image has sat side by side on a front page with Moammar Gadhafi. The FIFA president is one of them.

January 7, 2013 -- Updated 2243 GMT (0643 HKT)

British Vogue Deputy Editor Emily Sheffield talks to CNN about the Duchess of Cambridge's style and brand preferences.

January 8, 2013 -- Updated 1439 GMT (2239 HKT)

After 10 years, David Bowie is making his return with a forthcoming album and a new single. Remind yourself of his career.

You're reading an article about
Iran faces oil revenue problem
This article
Iran faces oil revenue problem
can be opened in url
Iran faces oil revenue problem

Title Post: Iran faces oil revenue problem
Rating: 100% based on 99998 ratings. 5 user reviews.
Author: Destinyw News

Thanks for visiting the blog, If any criticism and suggestions please leave a comment