‘US sanctions prepared Iran to face historic oil crash’

First Vice President Es’haq Jahangiri says America’s tough sanctions targeting Iran’s economy and energy sector have helped the Islamic Republic adapt to the historic oil market crash, which has seen US crude futures plunge below zero for the first time in history.

“Crises and sanctions [imposed by] the United States of America have enabled us to develop the necessary readiness to run the country’s affairs under the current circumstances,” Jahangiri said in a Tuesday meeting with senior managers of Iran’s Ministry of Roads and Urban Development.

Tehran has drawn up special plans and managed to adjust its budget to zero oil income, Jahangiri added.

US oil futures continued to trade in negative territory on Tuesday, after closing down nearly $40 on Monday in their first ever sub-zero dive, as concerns grew the United States will run out of storage for a glut caused by the new coronavirus lockdown.

Global benchmark Brent crude also fell sharply in response to the collapse of demand following reduced economic activity.

The crash came after oil producers ran out of space to store the oversupply of crude left by the coronavirus pandemic, which has battered almost all world nations.

Jahangiri further said the US economy, which possesses 25 percent of the gross world product (GWP), has been selling its crude oil futures in negative territory since last night and “this indicates that other world countries will not remain unaffected by the economic consequences of the coronavirus” pandemic.

He added that oil-producing countries, such as Saudi Arabia, will definitely encounter serious problems with crude traded at below $70 a barrel.

The Iranian vice president noted that even a deal announced last week between OPEC and independent producers to cut output by about 10 million barrels per day from May failed to prevent the drop in oil prices.

He warned that other businesses dependent on oil, such as the petrochemical and metal industries, would suffer the economic consequences of the coronavirus pandemic, asking Iranian universities and scientific centers to present scientific solutions in this regard.

Jahangiri also urged the administrative bodies to develop proper plans to deal with the current circumstances.

Iran has been under the “toughest ever” US sanctions since May 2018, when Washington abandoned a nuclear deal with the Islamic Republic and five other states.

After quitting the deal, the US under President Donald Trump unleashed a “maximum pressure” campaign mainly aimed at paralyzing Iran’s banking sector and driving to “zero” its oil exports — the country’s main source of income.

Faced with the obstacles that the US has been creating in the way of its oil sales, Tehran has stepped up work to wean the country off oil revenues and diversify its economy.

In December 2019, President Hassan Rouhani submitted a draft state budget to the Parliament, saying it had the least possible reliance on oil and was meant to resist and counter the draconian US bans.

The budget for the next Iranian fiscal year is yet to receive final parliamentary approval as many sessions of the legislative chamber have been cancelled due to the coronavirus outbreak.

Leader of the Islamic Revolution Ayatollah Khamenei has, on numerous occasions, stressed the need for the country to reduce reliance on oil as part of the “Economy of Resistance,” saying the Islamic Republic must continue on the path of scientific and technological progress towards that goal.

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