World oil prices Dropped, a problem for exporting countries?

Oil Exsploration

World oil prices Dropped, a problem for exporting countries?

World oil prices dropped in the past few months, giving advantage for consumers andlead to economic pressure against exporting countries, including Iran and Russiainvolved a dispute with the Western countries. However, analysts said the impact isnot too large.

LONDON —

Since the end of June, the price of Brent Crude Oil-the main benchmark for world oil-trade has dropped from nearly $ 115 a barrel to about $ 77 a barrel--down more than a third.

Oil prices fell because of increased production in America and in other places, and thedrop in demand caused by the protracted economic problems in Europe and indeveloping countries.

"At face value, it looks like this is a disaster for a number of the exporting country," says Pierre Noel, an observer of energy issues from its offices in Singapore, the International Institute for Strategic Studies.

Via Skype, he said, "countries that significant decline when faced with oil prices, they do a combination of two things. They slashed government spending on the one hand,and increasing the budget deficit, on the other side. "

And they have also attempted to reduce the economic pressures by convincing other Nations to end the sanctions against them. It applies to Russia in the dispute withWestern countries over the annexation of the Crimea and Eastern Ukraine'sinvolvement, as said Alastair McCaig of IG investment firm in London.

"This adds to the pressure on the situation now, they feel, does that mean they mightfeel the need to act, it may be necessary to relieve the situation related to the embargo," said McCaig.

Similarly, a drop in world oil prices is detrimental to Iran during this significant economic difficulties due to global sanctions related to its nuclear program. ButAlastair McCaig says Iran's leaders may not need to worry too much.

"Of course there is pressure, but it was the pressure that may be short term. If there are signs of economic recovery in the eurozone, recovery in the US continues, as wellas in the United Kingdom, we may see the sides the demand began to increase,therefore a country like Iran is able to survive in this situation with a bit easier, "addedMcCaig.

But it will take time. Meanwhile, Iran and Russia have to balance the combinedpressure of sanctions and low oil prices with the goals of their foreign policy. (VOA)