Iran holds trump card on oil: petrochemicals
To offset the drop in oil revenues, Iran can look to its petrochemical industry.
With oil prices in free fall, the more oil-rich OPEC member states, which chiefly depend on oil exports, are revising their projected revenues for their upcoming budgets downward and placing spending cuts on their agendas. Iran, as one of the top holders of energy resources in the world, is no exception, and senior officials have recently said it has suffered over $100 billion in revenue losses over the oil nosedive.
Already hit with years of Western sanctions over its nuclear program, the government of President Hassan Rouhani now finds itself facing a new source of pressure since oil prices have fallen 60% from their June 2014 peaks. In its proposed budget for the upcoming Iranian calendar year, which begins March 21, the government initially proposed a spending scheme based on the crude oil price of $72 a barrel. But with the continued slump in the energy markets, this figure was later lowered to $40 per barrel. For comparison, last year's budget was calculated assuming $100 per barrel of oil.
