Oil and Gas

Iranian president blames oil price fall on political conspiracy

Iranian President Hassan Rouhani has blamed unnamed countries of plotting to bring down crude prices and said the recent slump in oil prices was not based solely on economic factors.

With oil prices down more than 40 percent since June, Rouhani's administration has been scrambling for alternative sources of income. Iran's 2014 budget is based on oil at around $100 a barrel, while Brent crude is currently below $66 per barrel.

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Iranian president Hassan Rouhani
Sasha Mordovets | Getty Images

"The fall of the oil prices is not just something ordinary and economical, this is not due to only global recession," Rouhani told a cabinet session on Wednesday.

"The main reason for it is (a) political conspiracy by certain countries against the interest of the region and the Islamic world and it is only in the interest of some other countries."

Rouhani also said he had issued orders to his government to take measures to offset the effect of falling oil prices, without elaborating.

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OPEC Meeting: Iran doesn't need permission
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OPEC Meeting: Iran doesn't need permission

While some such as Iran and Venezuela have urged an output cut to support prices, the Organization of the Petroleum Exporting Countries (OPEC) decided in a meeting last month against reducing production.

Some Saudi Arabian officials have in recent months told private briefings that the kingdom was prepared to withstand depressed oil prices, possibly as low as $70 per barrel, for a prolonged period.

Such messages have sparked conspiracy theories, ranging from the Saudis seeking to curtail the U.S. oil boom, which needs high prices to remain profitable, to Riyadh looking to undermine Iran and Russia due to their support of Saudi's arch-enemy, Syrian President Bashar al-Assad.

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Iran has in the past accused fellow Muslim countries in the region of plotting with the West to bring down oil prices as a tactic to undermine its sanctions-hit economy.

While Islamic hardliners in Iran have been quick to blame Saudi Arabia for the price falls, Rouhani and his moderate government have been careful not to antagonise the kingdom, a fellow OPEC member and regional rival, in the interest of better future ties.

Riyadh has said its oil policy is based on economic principles.

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