The revisions are likely to mean that both Gulf states will either run deficits next year or will have to slash government spending.
Oman, Iran, budget on $45 a barrel oil
Oman and Iran are planning 2009 budgets based on $45 a barrel oil, following a record decline in crude prices by about $100 a barrel since July. The Omani council for financial affairs and energy resources agreed this week to amend the average oil price assumed in the sultanate's budget to $45 from $55, while Iran's government and a parliamentary committee have an initial accord to base next year's budget on $45-a-barrel crude, in place of a previous price assumption of $55 to $60 a barrel. The revisions are likely to mean that both Gulf states will either run deficits next year or will have to slash government spending to balance their budgets. The International Monetary Fund has estimated Oman's break-even oil price at $77 for the current fiscal year, and Iran's at $90, significantly higher than for most other Gulf states. Record oil revenues earlier this year helped Oman post a large budget surplus of 912 million rials (Dh8.7 billion) for the first quarter of its current fiscal year, instead of a forecast deficit. However, sharply lower oil prices later in recent months will have eroded the state's chances of avoiding a deficit for the full year. Oil prices on the New York Mercantile Exchange have dipped as low as $47.06 a barrel. They peaked at $147.27 in July. email@example.com