Page 19 - IRANRptJun19

Current account: transfers
185
406
509
565
511
427
558
Capital and financial account
-24,296
40,741
-22,161
-22,510
-8,002
113
/
Errors and omissions
-3,259
-17,766
-1,2j01
-2,595
-5,635
-1,350
-5,766
Source: CEIC, Central Bank of Iran
Iran running a current account surplus and has over $100bn of gross official reserves, says IMF
The International Monetary Fund (IMF) estimated in March that the government held $112bn of foreign assets and reserves. It also indicated that Iran was running a current account surplus. The figures imply that Iran might withstand the sanctions without an external payments crisis.
But the IMF also noted that Tehran was having difficulty accessing some of its reserves as its relations with foreign banks were constrained by the threat of US sanctions. Meanwhile, sanctions could cut the current account surplus sharply given the severe disruption they are causing to trade.
The IMF estimated in its World Economic Outlook released last October that Iran’s current account surplus would see a decline from 2.2% of GDP in 2017 to 1.3% in 2018 and 0.3% in 2019.
5.1.2 Import/export dynamics
Iran insisting on at least 1.5mn b/d of oil exports to stay in nuclear deal: report
Iran is reportedly insisting on exporting at least 1.5mn b/d of oil, triple May’s expected levels under tightened US sanctions, as a condition for staying in the nuclear deal.
The figure was communicated in recent meetings between Iranian and Western officials, including Iranian Foreign Minister Mohammad Javad Zarif, but has not been set down in writing, Reuters on May 13 reported four European diplomatic sources as saying.
In an attempt to reduce Iran’s crude exports to zero, Washington at the beginning of May ended waivers that had allowed the top buyers of Iranian oil to continue their imports for six months. The sanctions have already more than halved Iranian oil exports to 1mn b/d or less, analysts say, from a peak of 2.8mn b/d last year. Exports could drop to as low as 500,000 b/d from May, some estimates suggest. Iran has said it will resort to the grey market to help keep its oil sales up. Another big factor is whether China, the biggest buyer of Iranian oil, will keep up its purchases—the decision may hinge on how Beijing’s trade war talks with Washington pan out. Chinese oil buys from Iran could be used as a bargaining chip.
“Zarif said specifically that they want to sell 2 million barrels of oil [per day#, basically the level Iran was exporting before [Donald] Trump withdrew from the [nuclear] deal,” said a source present at the New York meeting in which the minister made the statement, according to Reuters.
“But I don’t think it is a serious demand. It isn’t possible and the Iranians know it isn’t possible.”
Iran’s Deputy Foreign Minister Abbas Araqchi said last week that for Tehran to stay in the nuclear deal, Iranian oil sales should reach their pre-sanctions level or at least “start the process of returning” to such a level.
According to Iran’s budget for this year, one third of the government’s income, or 1,425 trillion rials ($33.9 billion), should come from oil and gas exports.
The budget was based on a forecast crude oil price of $50-$54 per barrel and a US dollar rate of 57,000 rials, meaning the Iranian economy could remain sustainable if exports came to at least 1.5 million bpd.
EU officials also estimate Iran needs to sell 1.5 million bpd to keep its economy
19 IRAN Country Report June 2019 www.intellinews.com