Iran’s
Minister of Finance and Economy Ali Tayeb-Nia announced today that Iran is
revising its draft budget to assume an oil base price of $40 a barrel. The
Iranian calendar and fiscal year begins on 21 March. Tayebnia added that in
order to cope with falling revenues, the government will have to halt some
projects. (Fars News Agency/Bloomberg, 15 January)
President
Rouhani had presented a budget based on $72 oil to the parliament only on 7
December. That’s the budget that is now being revised to account for a $40 oil.
The price
of Brent crude has fallen by 54 percent in the past year, forcing governments
across the Persian Gulf to reduce spending, including cuts for subsidies on
petroleum products and capital budgets. On Wednesday, Qatar Petroleum and Royal
Dutch Shell called off plans to build a $6.5 billion petrochemical plant.
“Most
Gulf countries are pricing $50 oil for 2015,” said Naeem Aslam, chief market
analysts at Dublin-based Avatrade. “ (And) creditors want to be sure they
recoup their money so there could be hesitation to starting up new projects.”
(Bloomberg, 15 January)
Meanwhile, Brent
futures price fell by 2% on Thursday and finished at $47.67.
Photo credit: Iran’s Minister of Finance and Economy Ali Tayeb-Nia, center, announced revision of government’s proposed budget to account for a $40 oil.
Photo credit: Iran’s Minister of Finance and Economy Ali Tayeb-Nia, center, announced revision of government’s proposed budget to account for a $40 oil.
