“By drawing upon its National Development Fund to reimburse contractors active in upstream projects, Iran will make up for the impact of the oil revenue decline on these projects,” Zanganeh said. (SHANA, 14 November/Reuters, 15 November)
Iran needs to invest heavily in its aging oil production facilities and infrastructure, and the oil price plunge has slashed the funds it has available to do that.
Sovereign Wealth Fund Institute, which tracks such funds worldwide, estimates that Iran’s Fund is worth about $62 billion, but some of its assets are frozen by the sanctions imposed over the country’s nuclear program. By contrast, Saudi Arabia’s sovereign wealth fund exceeds $700 billion.
The International Monetary Fund estimates that with oil prices at $80 a barrel, Iran will run a budget deficit of $8.6 billion this year at the official exchange rate. (Reuters, 15 November)
Iran will adopt “contradictory” monetary policy for the next year, Zanganeh said. He pointed out that the government will raise tax revenues due to plunging oil prices, but such move would slow down an economy that is recovering only slowly from a deep recession triggered by the sanctions. (SHANA, 15 November)
File photo: Iran's oil export terminal at Kharq island (Getty Images)