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Iran sees oil prices at $70 per barrel
rediff.com ^ | August 03, 2005 | rediff.com

Posted on 08/03/2005 8:03:02 AM PDT by humint

Oil cartel OPEC's second largest producer, Iran on Wednesday said it expects crude oil prices to touch $70 a barrel by the end of 2005 due to demand-supply mismatch.

"Many experts expect oil prices to reach $70 per barrel at the end of this year. We think it may happen," Iranian Deputy Oil Minister Nejad Hosseinian said. He said oil prices were at an all time high as "demand is higher than supplies. (For producers to) increase supplies of crude will take time."India, which depends on imports for 73 per cent of its oil needs, is already facing a huge burden due to crude prices crossing $60 dollars a barrel. While import bill has shot up 40 per cent, the government has been forced to raise fuel prices twice in the last one year despite state-run firms absorbing almost Rs 18,000 crore (Rs 180 billion) of impact on petrol, diesel, LPG and kerosene prices in 2004-05 and Rs 9,800 crore (Rs 98 billion) this fiscal.

"If demand rises more and there is no supply to cover it, prices will go up," Hosseinian said. He said experts have warned of crude prices further going up from current levels of $61 dollars a barrel as demand goes up with setting in of winter. "We think it may happen," he said when asked if Tehran shared the views of experts, who have predicted crude crossing $70 dollars a barrel by end of 2005.


TOPICS: Business/Economy; Foreign Affairs; War on Terror
KEYWORDS: 1979; analysis; business; economy; india; iran; naturalgas; nuclear; oil; opec; pakistan; petroleum; price; revolution; terrorism
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To: humint

When oil is the topic, we find that even our enemies are hard-nosed and realistic. While there is a lot of speculation in the area of scams by fly-by-night operators in the oil investment market such as project oil reserves yet to be discovered, oil pros try their best to project accurately whether Texan, Iranian, or Russian.


21 posted on 08/03/2005 10:07:04 AM PDT by RightWhale (Withdraw from the 1967 UN Outer Space Treaty and open the Land Office)
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To: RightWhale
"When oil is the topic, we find that even our enemies are hard-nosed and realistic."

Agreed, however Iran has consistently pushed for an increase in prices within OPEC. The Saudis have kept prices reasonable until now... The Iranian government has demonstrated a willingness to attack U.S. interests on every front including the oil industry. Petroleum prices have a direct impact on our economy and no matter how accurate the price estimate is, Iran’s policies are the rocket propulsion driving oil prices into the stratosphere.

22 posted on 08/03/2005 10:18:00 AM PDT by humint (Define the future... but only if you're prepared for war with the soldiers of the past and present!)
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To: quark
"I see Iran as a glass parking lot."

If we take that route; think broken glass. Earthquakes like the one in Bam would break it up good... besides that, drilling for oil or gas through glass is bound to make a mess.

At the moment, it looks like the Iranian people are pissed off enough to take care of this problem themselves. A democratic Iran [what the Iranian people want and are working for] would bring the country back in the community of nations and put an end to the U.S.-Iran fued. A democratic Iran would be much more likely to put its oil revenue into social programs, ie. education and roads, and spend less time executing political dissidents, making missiles and funding terrorism in the ME, EU and US.

23 posted on 08/03/2005 10:28:02 AM PDT by humint (Define the future... but only if you're prepared for war with the soldiers of the past and present!)
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To: humint

It might be so. Gov't policy affecting oil prices can be noxious, as it was when the Saudis, our friends, staged their oil embargo. There is OPEC though, which definitely is the main control over oil price. They would like to have oil price high, but at the same time want to keep their market viable. If they set the price too high, they lose business even if the world oil supply is not as elastic as it once was. The last thing they want is for oil consuming markets to turn to nuclear power and permanently reduce oil imports.


24 posted on 08/03/2005 10:28:22 AM PDT by RightWhale (Withdraw from the 1967 UN Outer Space Treaty and open the Land Office)
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To: RightWhale
"The last thing they want is for oil consuming markets to turn to nuclear power and permanently reduce oil imports."

Internationally accepted policy is to have a balanced and stable price. If the price for oil is too high, huge wealth transfers to the oil producing countries where as the oil consuming countries can't afford to produce or ship products. This sparks a recession which will inevitably lead to reduced demand for everything, including petroleum products.

Alternative energy sources in consuming countries introduce a stabilizing factor that benefits the entire energy sector. Iran is an interesting case. As an oil producer, their nuclear bid is causing instability and is in line with other aggressive behavior that should be a major cause for concern. The Iranian system of Valeyat -E-Faqhee or supreme religious rule is a regressive and confrontational system. The fact that they own a significant portion of the world's proven energy reserves is very disconcerting, to say the least.

25 posted on 08/03/2005 10:47:34 AM PDT by humint (Define the future... but only if you're prepared for war with the soldiers of the past and present!)
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To: humint

Interesting analysis. If Iran goes nuclear, they wouldn't need to consume their own oil product and would have more to sell, but they are a smallish market themselves. If India goes more nuclear, they wouldn't need so much oil product. Same for China, Japan, EU, and America, the major and coming major consumers.


26 posted on 08/03/2005 10:52:19 AM PDT by RightWhale (Withdraw from the 1967 UN Outer Space Treaty and open the Land Office)
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To: RightWhale
I'm usually hard on the Department of State but they have a extreemly dificult job to do. Managing "U.S.-India-Pakistan-Iran" relations is serious business. The DOS is doing a great job offering India non-threatening nuclear technology. The question then becomes, why isn't Iran developing non-thratening nuclear technology? The only logical answer is that, Iran is a threat! The short article below demonstrates how the DOS is managing the multi dimensional relationship...

Indo-US nuke pact only to help N Delhi produce peaceful energy Aug 3, 2005 03:20:00 PM

Islamabad, Aug 3 (PTI) Making it clear that it would not assist India in producing nuclear weapons, the US has said that the recent nuclear pact signed between the two countries was only to help New Delhi generate energy through peaceful nuclear technology. In a video conference, US Assistant Secretary of State Christina Rocca also told editors of Pakistani newspapers last night that the ten-year defence pact with India was actually the renewal of an old one and its aim was to stabilise the region. She affirmed US opposition to the India-Pakistan-Iran gas pipeline, saying Tehran had violated the Non-Proliferation Treaty (NPT). The India-US nuclear agreement would help India generate only energy through peaceful nuclear technology and would not assist in producing nuclear weapons, Rocca said. "We will not help India make nuclear weapons," she told 'News' daily. The ten-year defence pact with India, she said is actually the renewal of an old one and its aim is to stabilise the region, she said. The US, she said is opposed to the India-Pakistan-Iran gas pipeline as Iran has "violated" the NPT and accused Tehran of sponsoring terrorism. "Its nuclear programme is a matter of great concern for us." PTI

27 posted on 08/03/2005 11:21:52 AM PDT by humint (Define the future... but only if you're prepared for war with the soldiers of the past and present!)
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To: humint
Crude oil resulting from Katrina massive destruction effecting large amounts of oil facilities (& other markets factors) has soared above $70 a barrel.

We can only hope Iran's despotic Islamic rulers will not be around longer then this coming winter to enjoy their massive oil profits.

28 posted on 08/31/2005 12:43:44 AM PDT by M. Espinola (Freedom is never free)
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