Iran has adjusted its spending to zero oil revenue, the country’s vice president said as oil prices are witnessing a drastic decline amid the escalating oil glut and low global consumption due to the worldwide pandemic crisis, according to Iranian News Agency (IRNA).
Speaking at a meeting on Tuesday, Eshaq Jahangiri said as the world is already suffering from strong coronavirus pressure, the U.S., which controls 25% of global gross supply, has put futures oil prices below a level that is destined to cause financial losses to other oil exporting countries.
Jahangiri said oil-exporting countries like Saudi Arabia would face severe problems with oil prices below $20 per barrel, as they believe that running the state is impossible with oil prices at less than $70 per barrel.
'But the Islamic Republic of Iran, with reliance upon grace of God Almighty and the plans developed, has managed to adapt its budget to the situation with no oil income,' IRNA quoted Jahangiri as saying.
WTI crude oil fell Monday into negative territory for the first time in history. The price of WTI under the futures contract, which expires Tuesday, fell to as low as -$37.63 by plummeting more than -290%, indicating that the massive oversupply against low demand is forcing suppliers to pay buyers to unload their inventory.
Brent crude oil dived below the threshold of $20 per barrel on Tuesday. It fell to as low as $18.02 per barrel, marking its lowest level since February 2002, at 0935 GMT for a 29.27% daily loss after it closed Monday at $25.48 a barrel.
OPEC+ oil producing nations agreed on April 12 to cut their total oil production starting from next month -- a decision that came a month late when they previously met in Vienna, Austria on March 6.
The one-month delay to curb output, on top of implementing cuts from May 1 onwards, has left the global oil market with an excess of supply to add to the glut, which in turn has dramatically pushed down crude prices.
By Sibel Morrow