While Iran's GDP growth reached 4 percent during the fist half of the current fiscal year after a two-year long contraction, the figure for country's mining sector indicates 10 percent growth.
Iran, who lost half it's oil export volume since early 2012 due to western sanctions, also suffers from United States' sanctions which have prohibited transferring Iran's oil revenues into country. Iran reportedly has about $100 billion of blocked assets outside.
Beside these problems choking the country's economy growth, the huge plunge in oil prices on international markets raised concern among Iranian officials.
A member of Energy Commission of Iran's parliament Hossein Nejabat told Trend Jan.7 that legislators are discussing how the budget can get rid of oil revenues.
Before him, two scrolls backed by tens of MPs have been signed, one of them demands decreasing oil export by 25 percent and another is aimed to halt oil export if prices fall below $50 in the next Iranian fiscal year.
Currently the oil prices fluctuate around $50/barrel, 55 percent less than prices in June
2014. Iran reportedly exported about one million barrel of crude oil and a little more than 400,000 barrels of condensate during the current fiscal year, started on March 21.
Gal Luft, co-director of the Institute for the Analysis of Global Security (IAGS) a Washington based think tank focused on energy security told Trend, "I believe Iran is now already scratching the bottom in terms of petroleum generated cash reserves and has shifted deep into the so called "economy of resistance," which Khamenei, introduced last year."
Iranian Supreme Leader Ayatollah Ali Khamenei ordered implementation of a Resistance Economy model during the last few years due to hard-binding sanctions effect on Iran's oil export imposed by EU and the US.
However, the share of oil revenues in Iran Iran's new budget bill is about 31.5 percent. Iranian government planned to export 1.3 mb/d of crude oil (including gas condensate) with a price at $72/barrel for next fiscal year, which will start on March 21.
"Clearly the move by the parliament is designed to allocate more oil to the domestic market. This tells me the Iranians are getting close to giving up on oil revenues as means of national sustenance," Luft says.
Luft , who is a senior adviser to the United States Energy Security Council America's highest-level extra governmental energy advisory committee and co-chairman of the Global Forum on Energy Security added that "Instead, Iran is banking on gold and is doubling production of precious metals. The gold trading system is much less transparent than the monetary system and the Chinese and Russians are buying large quantities without noticeable impact on gold prices. This tells me that Iran is pouring a lot of gold into the market to offset the loss of oil revenues".
"So bottom line, they still have breathing room albeit not backed by oil revenues," he said.
Iran's mining sector
According to latest available official statistics until mid-2013, the gold reserves of the Central Bank of Iran were 95 tons.
Head of the Geological Survey of Iran Behrouz Borna said in May that Iran's gold reserves are estimated to be over 340 tons, with 2.5 metric tons production capacity. Iran also started a study of the Zarshouran gold mine, discovered earlier in the north-western region in order to double the gold production capacity in near future.
Despite, its restricted amount of gold reserves, Iran has a huge amount of other mineral reserves that stand at 37 billion tons, but not developed significantly.
The current share of crude oil export revenues in the country's GDP is about 10 percent, while the share of mining sector is only about one percent.
Iran's produces about 3.2 mb/d of crude oil, condensate and NGLs, of which about 1.7 mb/d is consumed inside. The country's sits on 33.6 trillion cubic meters of gas as well as 157 billion barrels of recoverable oil.
Iran's GDP at current market prices decreased from about $480 billion in 2011 to around $366 billion in 2013.
By Dalga Khatinoglu