DUBAI (Reuters) - Iran’s dependence on oil revenue is putting the Islamic Republic’s economy at the mercy of major powers, Supreme Leader Ayatollah Ali Khamenei said on Wednesday.
With oil losing a quarter of its value since June, President Hassan Rouhani’s administration has been scrambling for alternative sources of income.
Iran’s budget is based on oil priced at around $100 a barrel while Brent crude LCOc1 is currently below $87.
Hitting prices is abundant supply as well as concern that slowing economic growth in Europe and China will soften demand.
“Running our country on oil revenue leaves Iran’s economy at the mercy of major policymakers in the world,” Khamenei said, referring to the sharp drop in oil prices.
“It is all but obvious what future lies in store for such a country ...Instead of relying on its mineral resources, Iran should rely on the talent and potential of its youth.”
“Only then would Iran’s economy become immune to the influence of powers,” he said.
On Monday Iran’s government spokesman 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, which is a fellow OPEC member and regional rival, in the interest of better future ties.
OPEC’s second-largest producer, Iran is normally among the first members of the oil producers’ group to call for supply cuts to support prices.
So far Gulf members of the Organization of the Petroleum Exporting Countries (OPEC) have indicated their reluctance to cut output to lift prices when the group meets on Nov. 27.
In a change of tack, Iran has said this month that it can live with lower oil prices and that there was no plan for an emergency OPEC meeting to stop the slide in prices.
Writing by Rania El Gamal and Mehrdad Balali; editing by William Maclean and Jason Neely