With oil prices in free fall, the more oil-rich OPEC member states, which chiefly depend on oil exports, are revising their projected revenues for their upcoming budgetsdownwardand placing spending cuts on their agendas.Iran, as one of the top holders of energy resources in the world,is no exception, andsenior officials have recently said it has suffered over$100 billion inrevenuelossesover the oil nosedive.Already hit with years of Western sanctions over its nuclear program, the government ofPresident Hassan Rouhaninow finds itself facinga new source of pressure since oil prices have fallen 60% from their June 2014 peaks.In its proposed budget for the upcoming Iranian calendar year, which begins March 21, the government initially proposed a spending scheme based on the crude oil price of $72 a barrel. But with the continued slump in the energy markets, this figure was laterloweredto$40 per barrel. For comparison, last year's budget was calculated assuming$100 per barrel of oil.
Meanwhile, Saudi Arabia, as the world's largest producer of crude oil and another OPEC member, has similarly admitted that the precipitous fall in oil prices since June will leave Riyadh with its first budget deficit since 2011.Some in Iranhave lashed out at Saudi Arabia, accusing it of conspiring with the West to keep oil prices low in a bid to put more pressure on Tehran. On Jan. 13, Rouhani also warned that any countries contributing to the fall in global oil prices would regret themove and warned thatSaudi Arabia and Kuwait would sufferalongsideIran.
This article was written by Maysam Bizr for Al-Monitor on January 24, 2015. Maysam Bizris a freelance journalist and translator in Iran who focuseson Iran's foreign policy and nuclear program. He has worked for and contributes tovarious media outlets in Iran . On Twitter:@m_bizar
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