Iran's President Hassan Rouhani presented his budget Sunday, with OPEC's decision to cut production helping to boost its expected oil revenues. Rouhani's 2017-2018 budget is based on oil prices of $50 per barrel, up from $40 last year, with a focus on unemployment, water resources, railways and the environment. The sums look realistic after last week's historic agreement by the 14-member Organization of the Petroleum Exporting Countries (OPEC) to cut production by 1.2 million barrels per day (bpd), which has already boosted oil prices to over $50.
Iran was exempted from the cuts as it seeks to regain the market share it lost during years of international sanctions. Since sanctions were lifted in January under a nuclear deal with world powers, its oil production has risen from 2.7 million bpd to 3.8 million, Rouhani said, and it aims to hit almost 4 million bpd by mid-2017. However, Rouhani said Iran still needed to meet its target of eight percent growth over the next five years as it seeks to rebuild an economy ravaged by international sanctions and domestic mismanagement. Adding to the challenges, the rial has taken a pounding in the past fortnight, losing more than eight percent of its value and falling to around 39,500 to the dollar on the open market.
The rial's collapse has been closely tied to events in Washington, where the U.S. Congress voted last week to renew sanctions against Iran that were not covered under the nuclear deal. The election of Donald Trump, and his appointment of several people with strongly anti-Iranian views, have also added to the uncertainty around Iran's economy.
Rouhani called the potential renewal of sanctions a "clear violation of the nuclear accord" and called on President Barack Obama to veto the bill when it lands on his desk this week.