ergy analysts will tell you that the recent drop in crude oil prices is due to booming production and slowing economic growth in Europe and Asia. But Iranian President Hassan Rouhani says it’s part of a larger conspiracy.
“The fall of the oil prices is not just something ordinary and economical, this is not due to only global recession,” Rouhani said during a cabinet session on Wednesday, according to Reuters.
“The main reason for it is (a) political conspiracy by certain countries against the interest of the region and the Islamic world and it is only in the interest of some other countries,” Rouhani said.
Though Rouhani did not blame any particular country, Islamic hardliners have blamed Saudi Arabia, their chief rival. Rouhani, however, has steered clear from blaming the Saudis for conspiring to hurt Iran with low oil prices.
Iran has been hit hard by falling oil prices. With oil below $70 per barrel, prices are not high enough to fund Iran’s government activities. According to previous Reuters data, Iran needed crude oil prices to be at least $136 per barrel in 2013 to pad its finances. For 2014, Iran reportedly needs crude oil prices to be around $100 per barrel.
Iran and Venezuela were the two main OPEC member states to push for sharp oil production cuts to bring prices back up. But the Saudis, OPEC’s largest producer, overruled them and OPEC decided not to cut production to buoy prices.
News reports have speculated the Saudis are trying to wait out U.S. companies by letting crude oil prices collapse. Saudi Arabia can produce oil at a lower cost than U.S. and Canadian producers can.
Reuters reports that Saudi officials have hinted that the country is willing to live with crude oil prices below $70 per barrel for a prolonged period of time. Some energy experts are worried crude oil prices that low will hurt U.S. production.
But U.S. oil companies don’t have to fund public expenditures with oil revenues, while OPEC states do. U.S. oil producers have also given little indication they will be slowing production as crude prices fall — some North Dakota producers say they can survive with oil prices as low as $45 to $50 per barrel.
Others, however, have speculated that the Saudi decision not to cut production is to undermine Iran And Russia for their support of Syrian President Bashar al-Assad.
Rouhani, however, does not seem to be waiting for OPEC to order production cuts and said his government will take measures to combat lower crude prices, though he did not specify any actions.
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact email@example.com.
The opinions expressed by columnists are their own and do not necessarily represent the views of Barb Wire.