Iran, OPEC’s number-two exporter, hit out at the recent hike in oil prices, saying real prices were far lower than the 90-dollar-a-barrel level of last week. “Oil is still cheap,” acting Oil Minister Gholam Hossein Nozari said in an interview with the Iran newspaper.
“The sweet taste of oil is not tangible because it is very far from the range that is expected by us (Iran and OPEC),” Nozari said.
Nozari argued that calculations based on current inflation rates and depreciation of the dollar’s value as well as high costs of oil and gas projects puts oil’s true price at less than $50 a barrel.
“Today’s prices even at the level of $90 a barrel (in the market) are not effective because the real price of oil is currently about $47 per barrel (as profit),” he said.
Nozari also said political issues were casting a “shadow of threat” on the flow of investment into the oil-producing countries, especially Iraq, Nigeria and Venezuela.
“If the owners of financial sources do not make a meaningful investment in the oil-rich countries, oil prices will be uncontrollable in the near future,” he warned.
Oil prices ended lower Friday after striking a record high above $90 in New York amid global supply jitters and lingering tensions between Turkey and crude producer Iraq.
New York’s key oil futures contract, light sweet crude for delivery in November, closed down 87 cents at $88.60 a barrel. But the contract had earlier surged to a record $90.07. That beat the previous high of $90.02 set late Thursday.
In London, Brent North Sea crude for December delivery settled 81 cents lower at $83.79 after hitting a record $84.88 on Thursday.