A spokesperson for the Islamic Republic Plan and Budget Organization (PBO) says President Hassan Rouhani's administration exaggerated Iran’s expected oil exports in next year’s budget for political reasons.
The budgetary assumption that Tehran will be able to export one million bpd of crude was intended to "inspire hope," Mojgan Khanlou admitted on a radio talk show.
After the United States imposed tough sanctions on Iran in 2018, the country’s oil exports have plunged from more than two million bpd to around 300,000 or less.
Ms. Khanlou also insisted, "Had we compiled next year's budget based on exporting only 300,000 barrels of crude per day; it would have meant that we had already bowed to the (U.S.) sanctions."
Earlier on Sunday, December 8, Rouhani had presented a draft state budget of about $39 billion to parliament, asserting it was designed to resist U.S. sanctions by limiting dependence on oil exports, but projecting one million bpd of oil exports.
However, Rouhani's administration has not revealed figures for the oil price used in the budget calculations. Meanwhile, the International Monetary Fund (IMF) has estimated Iran would need oil prices to be triple current levels to balance its budget as its crude exports have plunged.
SEE ALSO: Iran Parliamentary Think-Tank Warns Government About Unrealistic BudgetAnalysts and experts, as well as the members of Iranian parliament (Majles), have also repeatedly noted that basing the budget on selling one million bpd of petroleum was unrealistic.
Ultimately, during the debate on the budget, it was disclosed that the volume of Iran’s oil exports in next year's budget is not more than 300,000 bpd.
In the meantime, based on Radio Farda's data, during November Iran managed to load nearly 303,000 bpd of crude, while the destination of more than two-thirds of it was unknown.
In international waters, Iran is capable of hiding the volume, identity of the buyer, and destination of its oil in different ways. But it is next to impossible to conceal the amount of crude oil loaded on tankers in the Persian Gulf and destined for the international market.
Debating with experts on Rahyaft (Approach) radio show, Ms. Khanlou reiterated that selling one million bpd of crude oil assumed in the budget was merely a face-saving measure vis-a-vis U.S. sanctions.
Reacting to Khanlou's remarks, a university professor and economy expert, Seyyed Ehsan Hosseini, said Iran’s crude oil exports is nearly 200,000 to 300,000 bpd, and assuming larger figures in the budget only leads to a huge deficit.
"The government had the same argument last year, claiming that, through serious attempts, Iran could export much more oil. But that never happened, and ultimately we had a budget with $45 billion deficit," Hosseini asserted. He further noted, "The government's report on its oil income in the first eight months of the Iranian calendar year (beginning March 21, 2019), shows that Iran has managed to export nearly 200,000 bpd of crude oil."
Presenting the budget to Majles, Rouhani insisted on December 8, "This is a budget to resist sanctions --- with the least possible reliance on oil," adding, " This budget announces to the world that despite sanctions we can manage the country."
However, Iran is in dire need of foreign currency revenues and projections by the International Monetary Fund and the World Bank say its GDP will shrink by nine percent this year.