Iran needs oil at $127 to balance budget

Tehran: Iran needs oil to average $127 a barrel this year for its fiscal budget to break even, more than what Saudi Arabia needs to balance its spending plan, according to an inter-governmental Arab energy lender.

Oil prices must average $99 a barrel this year for the 12 members of the Organisation of Petroleum Exporting Countries (Opec) to be able to balance their national budgets, the Arab Petroleum Investments Corp, known as Apicorp, said in an e-mailed report.

Saudi Arabia, OPEC’s largest producer, will need an average price of $94 a barrel to balance its budget, the Khobar, Saudi Arabia-based bank said. Qatar will need $52 a barrel, the lowest price among OPEC countries, Apicorp said today. OPEC’s weighted average fiscal break-even price fluctuates within a relatively narrow range of $90 to $110 a barrel, the bank said.

“Evidence that the most influential member, Saudi Arabia, lies within that range strengthens the chances of making the fiscal break-even price a reliable predictor of price preference for OPEC as a group,” according to Apicorp.