Oil prices impact Iran´s economy

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Source: CCTV.com | 11-04-2008 11:04

The global financial crisis has cut the price of oil in less than half -- from a high of nearly 150 US dollars a barrel in July, to less than 70 dollars in recent days.

The global financial crisis has cut the price of oil in less than half -- from a high of nearly 150 US dollars a barrel in July, to less than 70 dollars  in recent days.(CCTV.com)

The world's major oil exporters, including Iran, say they've been hard hit by the price drop.

Iran is OPEC's second-largest exporter, and the country's foreign trade depends heavily on oil. But the global economic slowdown has seen prices decline sharply, leaving some Iranians anticipating the worst.

Iranian Businessman, said, "As a result of the oil price drop, the country's fund of dollars and other foreign currencies will decrease and it will prevent the government from implementing its projects and development. Industry and imports will be affected and people will not experience the comfort they are used to anymore."

As the world's fourth largest oil exporter, oil is by far Iran's most important product. Economists estimated that the country depends on oil revenue for a whopping 80 percent of its government budget.

Analysts say Iran - like fellow oil producer Venezuela - needs prices at near 100 US dollars a barrel to balance its national budget.

Saeed Laylaz, Iranian Economic Analyst, said, "For such a country, this is a very dangerous trend in which we are going to be more dependent to (on) oil revenue."

Tehran's stock index also plunged about 12 percent last week, its lowest close in years. And soaring prices continue to hurt ordinary people, with inflation estimated at 27 percent or more.

Editor:Zhang Pengfei