Can Tehran survive a ‘zero oil’ budget, if US blockade on Iran persists?
Summary
Iran’s government is preparing for a prolonged economic crisis and has directed officials to plan for a budget with little or no oil revenue if the U.S. blockade and sanctions continue. Economists warn that reduced oil income could make it harder to fund public spending, support the currency and contain inflation, while Iranian officials say the country will not collapse.Key Facts
- Iran’s November 3 budget directive outlined scenarios involving either continued restrictions or an improvement that could include lifting the blockade.
- Mohammad Ghasemi of Iran’s Plan and Budget Organization said the government must prepare for oil revenue to reach zero next year.
- The article says the U.S. military began a blockade of Iran’s southern ports on April 13, lifted it under a June agreement, and imposed a second blockade on July 14.
- The U.S. military said it had redirected 147 ships and disabled five while enforcing the blockade, and claimed to have destroyed 10 Iranian oil tankers.
- The U.S. Treasury said Iran had loaded no oil onto vessels since August 25.
- Kpler assessed in late October that Iran’s oil production had fallen below 2 million barrels per day in recent months, down from more than 3.4 million per day in January and February.
- Economist Isaac Saidian said near-zero oil income could strain Iran’s ability to pay salaries and pensions, provide essential goods and prevent inflation from rising.
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