Hitting Them Where It Hurts

Forget ISIS — Iran has a much more immediate problem:

According to Iranian media, and the talk on the street, Iran is winning the conflict with the rest of the world over their nuclear program. The sanctions are being reduced and the next round of talks on the Iranian nuclear program are seven months away. The countries (China, France, Germany, Russia, the Great Britain and the United States) handling the anti-nuclear negotiations with Iran cannot agree on a strategy and are unable to get stronger sanctions imposed. But all this is an empty victory for Iran because what hurts Iran the most is the plunging price of oil. It’s down by half (from $110 to $55 a barrel) since 2013. Iran had long depended on $100 a barrel oil for their budget planning. That was recently cut to $70 and some officials admit that planners are now looking at what will happen if it gets down to $40. Such an event would be disastrous and every Iranian would feel the loss personally. Nearly half the government income comes from oil (which normally accounts for 25 percent of GDP). Iran is looking at serious (over ten percent) GDP shrinkage if low oil prices continue.

God bless the Saudis and American frackers.