UPDATE 2-Iran sees limited improvement in oil exports next year
* Easing of shipping insurance ban may help limited oil export rise
* Government spending slashed after slump in oil revenues
By Daniel Fineren and Marcus George
DUBAI, Dec 3 (Reuters) - Iran's draft budget estimates oil exports at around 1.1 million barrels per day (bpd), oil ministry website Shana said on Tuesday, indicating Tehran sees no major recovery in sales next year despite improving relations with the West.
Iran could benefit from very limited sanctions relief following a nuclear deal reached with world powers last month. The measures do not include any relaxation of tight controls on its oil sales that have slashed exports to around 1 million bpd from around 2.5 million bpd in 2011.
President Hassan Rouhani is to present the draft budget for the next Iranian year - beginning March 21 - to parliament on Wednesday.
Based on the open market exchange rate of around 29,500 rials to the dollar, it puts total annual government expenditure at just $64 billion, or $77 billion at the official exchange rate.
Rouhani's austere budget assumes an average oil price of $100 per barrel, about $10 below current prices for benchmark Brent crude, and forecasts 300,000 bpd in sales of gas condensate, a light oil.
Outgoing president Mahmoud Ahmadinejad's draft budget for 2013 to 2014 was about $200 billion based on the open market exchange rate at the time.
The White House estimates that Iran has lost more than $80 billion since the beginning of 2012 because of the sharp drop in oil exports.
Facing increasing economic isolation, Ahmadinejad tried to steer Iran towards a more self-sufficient economy based on boosting the export of refined oil and non-oil products and reducing its reliance on oil.
"The government to the greatest extent possible should reduce its dependence on oil in a way that this issue has been emphasized by the Supreme Leader," Saeed Zamanian, a member of parliament's budgetary planning committee, told Iran's Fars news agency.
"This issue has caused the economy of the nation to falter from sanctions ... development project and national planning have suffered."
The landmark deal between Iran and six world powers to curb Tehran's nuclear programme in exchange for limited sanctions relief included a pledge to ease an insurance ban that could help some Iranian oil shipments.
Although Washington said it would not allow any increase in Iranian oil exports for at least six months, it also suspended plans to squeeze Iranian oil exports further - if Iran kept its side of the deal.
Despite Washington's insistence that it would not relax sanctions, the agreement sparked speculation over how much Iranian oil might flood back into an already well supplied global market next year.
In addition to having to reduce purchases to win waivers from U.S. sanctions, Iran's big oil customers in Asia have been discouraged from importing even the permitted volumes because of difficulties getting insurance for shipments.
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