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Iran takes steps to reduce economic risk of falling oil prices

Despite media reports to the contrary, Iran's government has reduced its economic vulnerability to falling oil prices.
EDITORS' NOTE: Reuters and other foreign media are subject to Iranian restrictions on leaving the office to report, film or take pictures in Tehran.

A general view of an oil dock is seen from a ship at the port of Kalantari in the city of Chabahar, 300km (186 miles) east of the Strait of Hormuz January 17, 2012. REUTERS/Raheb Homavandi  (IRAN - Tags: SOCIETY) - RTR2WFMH

The decline of international crude oil prices has led to speculation about the financial position of the Iranian government. However, a closer look at government finances and overall trade and economic realities underlines that Iran’s vulnerability to oil price fluctuations is reduced enormously.

Some international observers and news media (including CNN) have been repeating a myth stating that Iran needed an oil price of $140 per barrel to balance its budget. Where such figures come from remains a mystery to the author.

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