As the downward trend in oil prices on the world markets continues, the Iranian regime is lowering the crude price for this year’s budget to $40 a barrel.
The government is revising its draft budget to assume a base price of $40, from $72, the state-run Fars News Agency reported Finance and Economy Minister Ali Tayebnia as saying today.
The Iranian regime had based its budget for the current Iranian calendar year ending March 20 on oil price of $100 per barrel and exports of about one million barrels per day.
The sharp dip in the oil price, now at below $50 a barrel, has dramatically worsened the regime’s budget deficit.
The government of Hassan Rouhani predicts a budget deficit of 9 billion dollars for the remaining months of the fiscal year ending March 20.
The Chairman of the Management Planning organization, Mohammad Bagher Nobakht, said on Wednesday: “Our prediction is that, by the end of the year, there will be lack of achieving of 9 billion dollars income however we run the country.”
According to official figures, one third of Iran’s economy is dependent on oil. Moreover, according to experts, more than two-thirds of foreign exchange earnings come from Iranian oil exports.
Hassan Rouhani presented a budget to lawmakers on Dec. 7 based on $72 oil. Since then, Brent crude has dropped 32 percent.
According to figures published by the Central Bank of Iran, oil revenues of Iran were $ 119 billion in 2011 and $ 68 billion in 2012. Thus, in one year, Iran’s oil revenues have dropped by almost half. This sudden drop has worsened the economic crisis in Iran and in particular caused a decrease of 6% of economic activity in the country.
According to official figures published by the Central Bank of Iran, the oil revenue of the country during the last ten years is as follows (amounts in billions of dollars):
2004: 36.30 billion $
2005: 53.82 billion $
2006: 62.01 billion $
2007: 84.55 billion $
2008: 86.62 billion $
2009: 69.96 billion $
2010: 90.19 billion $
2011: 118.86 billion $
2012: 68.14 billion $
2013: 64.79 billion $
In 2015, assuming that Iran would export one million bpd and that oil prices would be around $ 40 a barrel, Iran’s oil revenues will be around 15 billion dollars (less than one forth compared the oil revenues of the country in 2013).
The main reason for the continuation of the economic crisis in Iran is that the clerical regime spends a considerable portion of the country’s income supporting the Syrian regime and supporting the Lebanese Hezbollah and Shiite paramilitary groups controlled by Iran in Iraq.
According to a recent report, the Iranian regime spends, every month between 1 and 2 billion dollars supporting the dictatorship of Bashar Assad in Syria.