Iran unveils budget plan to fend off US sanctions by cutting dependence on oil

Tehran will gradually reduce reliance on its oil reserves, ranked the third largest in the world, as it is set to resist the sweeping US sanctions that seek to curb Iranian crude exports to zero.

President Hassan Rouhani has pitched a budget bill to parliament, telling lawmakers that “this is a budget to resist [US] sanctions... with the least possible dependence on oil.” He estimated it at around $38.8 billion for the next Iranian year which starts March 2020, according to Reuters.

The Iranian oil trade has been hit by US sanctions after the Trump administration unilaterally withdrew from the milestone 2015 nuclear deal last year. Among other punitive measures that were brought back, the US meticulously targeted the Islamic Republic’s crude exports.

Just last April, it abruptly ended exemptions granted to European and Asian buyers of Iranian oil, threatening penalties for those who carried on dealing with Iran.

Rouhani spoke weeks after a new oilfield with an estimated 50 billion barrels of crude oil was discovered in the southern part of the Islamic Republic. The site could become Iran’s second-largest oil deposit, significantly expanding its proven reserves.

Iran holds some of the world’s largest deposits of proven oil and natural gas reserves, ranking as the world’s third-largest reserve holder of oil, according to OPEC. The Islamic Republic’s proven crude reserves stood at 155.6 billion barrels in 2018, and the newly discovered oilfield would boost that figure by a third.

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