Iran's Central Bank warned Monday that if oil prices fall under $60 a barrel, the country's oil-dependent economy will struggle to survive the world financial crisis, the ISNA news agency reported.
"If (the) average price of oil stays at $60.60 in the remaining five months of the current year (to March 2009), we can get through this crisis safe and sound," the bank's deputy for economic affairs, Ramin Pashaifam, was quoted as saying.
"If the price falls under this, our economy will face big problems."
Oil prices surged to record highs in July of close to $150 a barrel but have since plunged, with the Organization of Petroleum Exporting Countries' basket price standing at $57.65 on Friday, despite the group deciding to cut its output.
Crude income accounts for 80% of foreign earnings for Iran, OPEC's second largest exporter, making the economy highly vulnerable to oil price shifts.
Pashaifam said that with a minimum price of $60, Iran will still need to use savings from oil revenues to cover its budget needs.
"In a case of $60 per barrel for oil, no cash will remain in the Oil Stabilization Fund," he said, referring to a fund which aims to guard against price fluctuations and to finance private sector projects.
Economy Minister Shamseddin Hosseini said Monday that the fund now contained $25 billion.
Analysts say Iran needs a price of around $80 to survive inflation and a global economic downturn.