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Iran turns to gold as free-fall in oil prices continues

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NCRI – The Iranian regime unveiled a new gold processing plant that expects to double annual gold production with hopes to revive its ailing economy which has been devastated by international sanctions imposed over its nuclear program.

The opening of the new gold processing plant near Takab in northwestern Iran, which was unveiled on Saturday in a lavish ceremony, comes as the price of U.S. crude oil has slumped to below $75 a barrel, a four-year low.

The International Energy Agency said on Friday the price of Brent Crude was now not expected to rise above its four-year low for at least 12 months.

The cornerstone of the plan is a new gold-processing plant near Takab in northwestern Iran, unveiled on Saturday in a lavish ceremony.

With oil prices in continued free-fall, Iran’s weak economic recovery is in danger. Like other oil producers, Iran needs higher oil prices just to break even.

While some Persian Gulf states can tolerate oil prices around $50 a barrel, Iran needs the price of crude to be much higher.

Iran, subject to crippling international sanctions, needs an oil price of more than $140 a barrel.

In Iran, the state-run Ebtekar daily newspaper said on November 8 that the regime’s budget deficit was $1.5 billion – but economists now believe the true figure is much higher.

The Tehran government had calculated its budget for 2014 based on oil priced at $100 per barrel and oil exports of around 300,000 barrels per day.

Meanwhile, South Korea’s imports of Iranian crude in the first 10 months of 2014 were below the 2013 average, meeting international sanction requirements, and it imported nearly 120,000 tonnes from the United States as it brought the first Alaskan crude in a decade.

Preliminary customs data from the world’s fifth-largest crude importer showed on Saturday that Seoul bought 283,287 tonnes of crude oil from Tehran last month, or 66,984 barrels per day (bpd), compared with 420,402 tonnes the year before.

Iranian crude shipments between January and October into Asia’s fourth-largest economy hit more than 5 million tons, or 122,564 bpd, down 9 percent from a year ago. It was also 9 percent below the 2013 average of 134,000 bpd, according to the data and Reuters calculations.