Iran Anticipates Less Oil Income In 2023, As Global Demand Cools
Iran’s income from crude oil exports will substantially decline in 2023, according to a report in the official government news website, IRNA.
Iran’s income from crude oil exports will substantially decline in 2023, according to a report in the official government news website, IRNA.
The Islamic Republic says that its oil export revenues were around $37 billion in 2022, higher than in 2021 and substantially more than in 2020, when it sold much less oil to China.
IRNA says that because of weaker global demand in 2023, Iran’s exports are estimated to reach $27.3 billion, around $10 billion less than in 2022.
Russia hit by sanctions has significantly increased cheap oil exports to China, becoming a competitor to Iran, although they are military and political allies.
Iran plans its budget according to expected oil revenue since it covers around half of all government financial needs. This year, the government has not published its budget outline yet for the next Iranian year that starts on March 21, 2023.
Already, Iran’s currency has experienced a shocking decline since September, falling from around 310,000 rials to the US dollar to more than 400,000, because of a huge rise in the money supply as the government prints more banknotes to pay its expenses.
Tehran keeps oil export and income figures a state secret and estimates are often offered by OPEC or other international organizations. It is believed that Iran offers hefty discounts to its main customer China, which allows its small refineries to import Iranian crude despite United States sanctions.
A drop in oil in 2023 will have a significant negative impact on the economy, leading to more money being printed by the government and higher inflation.
The high-ranking clerics have spoken against President Ebrahim Raisi's ultraconservative government, only after the Speaker of the Iranian Parliament Mohammad Bagher Ghalibaf (Qalibaf) who calls himself a neo-conservative went to see them in Qom.
This might be the starting point of a shift from policies based on conspiracy theories inspired by presidential adviser Saeed Jalili to more pragmatic ideas Ghalibaf has been offering as a prelude to what he called a move toward "a new governance" in Iran. Some social media users have called the move "a soft coup by pragmatists against the ultraconservatives," who try to blame most problems on machinations by “enemies”, meaning the United States and its allies.
The move comes while the Iranian government is at its lowest point of popularity after three months of street protests and another sharp devaluation of the Iranian currency in a matter of a week which brought the rate of exchange for the US dollar to 440,000 rials.
The clerics, the "sources of emulation" as they are known in Qom, hold the highest ranks in Iran's brand of Shi'ism and they are supposed to lead the nation by example in all matters of everyday life. Nonetheless, it is not clear how many people follow them and their advice.
Following meetings with Ghalibaf, Ayatollah Nouri Hamadani, a clerics who has been always silent in the face of whatever that the government has done to the economy, criticized Raisi for bragging about the country's progress and the state of the economy: "No prices have fallen and none of the people's problems have been solved. The only thing that has certainly happened is the devaluation of the Iranian currency."
Ayatollah Nasser Makarem Shirazi who has usually supported the Raisi administration and all the government's hard-line policies, said, "Not only the economic situation is not improving, but the inflation rate has been rising. People ask us why we do not warn the government about the situation. In factو we do warn, but the state television never broadcast our warnings."
Despite his criticism of the government's economic policies, Makarem Shirazi strongly supported the crackdown on protesters.
Ayatollah Jafar Sobhani said that "the Raisi administration has been always promising to solve the people’s problems but this promise has never been met." And Ayatollah Abdollah Javadi Amoli referred to inept officials and said, "We should not appoint good but otherwise inept individuals or capable but bad individuals who will embezzle government funds."
One of the first outcomes of the ayatollahs’ remarks against the Raisi administration was the replacement of Iran's Central bank Governor Ali Salehabadi who resigned on Thursday. The new Central Bank governor Mohammad Reza Farzin is no different from Salehabadi in terms of policies. However, the shock in the Iranian market because of rial’s steep fall forced the government to make a change to pretend that it cares. The actual change was a slight boost for the rial.
The Jomhouri Eslami newspaper, a conservative daily critical of the Raisi administration's ultraconservative policies, wrote in an editorial on Thursday that it would be a big mistake by officials to get the message of the ongoing protests wrong. And, not acknowledging the government's errors could be an even bigger mistake."
The daily pointed out that there is no silent majority in Iran. The people are suffering from injustice, economic corruption, high inflation and government's broken promises and they feel humiliated as the government does not seek their political participation. All of this and the government's insistence on its mistakes will inevitably escalate the people's dissatisfaction.
On the sidelines of ceremonies to kick off joint military drills codenamed Zulfaqar 1400 in the Sea of Oman on Friday, an IRGC Commander Major General Gholam-Ali Rashid warned regional countries against any cooperation with Israel in threatening the Islamic Republic’s national security by providing bases or facilities.
“Those bases as well as the points of aggression -- which is the occupying regime of Israel will be the target of attacks by our armed forces.”
Noting that the General Staff of the Armed Forces of the Islamic Republic, the traditional Army and the Revolutionary Guard concur that Israel is the most significant threat to Iran's national security, he said that the Islamic Republic Armed Forces consider military exercises as a “half war” and even a “war before war.”
Zulfaqar 1400 began with the key motto of “self-confidence, power, sustainable security” in an area stretching from the eastern sector of the strategic Strait of Hormuz to the northern tip of the Indian Ocean, with the first hours of the maneuver dedicated to safeguarding the coasts.
“The Navy’s rangers used improved arms and equipment to carry out the operation that lasted until dawn, and the naval forces used Dehlavieh, TOW, and shoulder-fired Misagh missiles against the enemy’s aggression on coastal lines,” Brigadier General Alireza Sheikh, spokesman for the drills, said.
