Tehran (Platts)--7May2008

The continuing devaluation of the US dollar will see oil prices continue
to rise, finishing the year around $160/barrel, Mehr news agency reported
Wednesday, quoting a senior official from the National Iranian Oil Co.

"It is predicted that with the continuation of the current devaluation of
the dollar, oil prices will be about 35% higher at the end of this year," Mehr
quoted NIOC director for marketing, Mohammad Ali Khatibi, as saying.

"As much as the value of dollar is appreciated or threatened, oil prices
will go through fluctuations," Khatibi said, adding that the hike in oil
prices would compensate for the depreciation of dollar.

Front-month crude futures on NYMEX were trading at $121.97/b at 0833 GMT,
up $0.13/b on the day.

Khatibi did not specify whether he was referring to the year as 2008 or
the Iranian calendar year, which ends March 19, 2009.

"The depreciation of the dollar as well as concerns over the consistency
of oil supply by big exporters such as Nigeria, Iraq and Venezuela are the
main reasons for the increase of oil prices," Khatibi said, ruling out
traditional reasons of demand and supply.

"The industrial countries know ... that there is no shortage in the
market and OPEC members are producing oil at their maximum capacity," Khatibi
said. He blamed non-OPEC oil producers who are unable to stand by their
forecasts for the uncertainty in the oil market.

"At the beginning of the year, these producers announce an increase in
their production, but after six months they do not fulfill their commitments,"
Khatibi said. "The industrialized countries should thank this organization
[OPEC] for not decreasing its oil output," he added.

Khatibi also warned that US threats against OPEC pressuring it to
increase output in a bid to arrest rising prices would backfire.
"Sanctions against OPEC members and imposing pressure on this
organization will cause more problems for the US and the industrialized
countries," Khatibi said.

Iran is OPEC's second-largest producer behind Saudi Arabia. According to
Platts data, Iran's production averaged 3.96 million b/d in March, above its
3.817 million b/d target.