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Wednesday, March 9, 2011

Rising Oil Prices Create Political Cushion for Iran http://iranprimer.usip.org/blog/2011/mar/07/rising-oil-prices-create-political-cushion-iran

What impact do higher oil revenues have on Iran economically? Higher oil prices will result in increased revenues and a bigger national budget, allowing Iran to increase its foreign exchange reserves. Oil money accounts for about 27 percent of Iran's total revenues, while crude oil accounts for 83 percent of the total value of exports.What impact do higher oil revenues have on Iran politically?Higher oil revenues may help the regime increase its welfare services and thereby improve its political position in the country. The government has recently implemented a subsidy reform program that compensates price hikes with cash subsidies to the bulk of the population. More oil revenues can help ensure the flow of cash handouts, at least in the early stages of implementation

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