Iran Braces for a Budget Without Oil Revenue
Iran is drafting next year’s budget under the premise that oil revenue could fall to zero, with senior budget official Mohammad Ghasemi telling the government on Monday to prepare for that scenario, as the country appears to be weeks away from that eventuality. Iran has loaded no crude since August 25, according to the US Treasury, and the oil it held at sea outside the US blockade fell from 88.8…
Iran is preparing its budget for the upcoming year, expecting oil revenue to collapse to zero. Senior budget official Mohammad Ghasemi advised officials to plan for this scenario, as Iran may run out of oil by mid-December. Oil accounts for roughly 30% of the government budget and 50% to 60% of total regime revenue. With oil production down to 2 million barrels per day, OPEC reported Iranian output at nearly half its pre-war level.
The US naval blockade has emptied the oil Iran holds at sea, leaving only 43 million barrels stranded within it. While Iran may not collapse immediately, the economic impact is severe, with a recession expected as non-oil output drops sharply. The government plans to maintain salaries, pensions, and debt payments without printing money, but will rely on other sources like oil deposit certificates and tighter tax collection.
The budget battle between a government seeking spending cuts and a parliament inclined towards raising it looms large.
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