Iran’s oil ministry has said that prices of US$70-$90 would not hurt the global economy, and even $100 might be safe.
“Consumers and producers are unanimous that the oil at $70-$90 prices are suitable prices and will not hurt the global economy,” Mohammad Ali Khatibi said.
“There are thoughts that an increase in the price of oil up to $100 per barrel will not create problems for the market.”
Anything in that range will prove a huge boost to Iraq, which has budgeted for just $70 oil for 2011. At $70 it will “almost” balance its deficit of $18bn, so anything more may bring forward its plans for a surplus, with a current target year of 2012.
OPEC is increasing its outlook for oil on the back of a recovering world economy, which will demand more oil. Its latest estimates put demand for next year up another 120,000bpd to 1.7m bpd. OPEC members are currently producing around 30m bpd.
Sources: Oil Ministry, SHANA, OPEC, Iraq Business News)