Rouhani
said that while oil now only accounts for one-third of Tehran’s budget, some of
the Gulf states are up to 95 percent reliant on it. “If Iran suffers from
the drop in oil prices, know that other oil-producing countries such as Saudi
Arabia and Kuwait will suffer more than Iran,” he said. He added that “Kuwait’s budget is 95 percent
reliant on oil,” and 90
percent of Saudi Arabia’s “annual
exports are related to oil.”
He
also said that falling prices for crude oil are the result of “a plot that will be overcome with
unity and resistance… Those [countries] who have planned the oil price
reduction against some countries should know that they will regret it,” he said, without elaborating on what
countries he meant.
Rouhani
was elected in 2013 on promises to turn around Iran’s sanctions-hit economy. He
has successfully lifted the country out of recession and recently began to
stress the importance of non-oil exports.
Iran
was somewhat caught off guard by the slide in oil prices, as its current budget
was based on sales at US$100 a barrel. Tehran cut that estimate to $72 in March
but oil has now hit a six-year low, with Brent crude trading at just $46. With
Rouhani at the helm, inflation rates have halved to less than 20 percent. With
progress in talks regarding Iran’s controversial nuclear program, some
sanctions by the West have been lifted.
But
as oil prices continue to tumble, there is now the prospect of a deficit in
Tehran, particularly as businesses are cut off from loans in the international
banking system, as most of the sanctions still remain in place.
By
seeking to hammer out a deal with the six world powers, Rouhani had hoped to
breathe life into the Iranian economy by opening Iran up to foreign companies
and partnership deals.
Due
to Western sanctions, Iran’s oil exports have dropped from 2.5 million barrels
a day in 2011 to about one million barrels today, according to the US Energy
Information Administration (EIA).
Russia Today: January
13, 2015 20:30
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