Difficult Year for Oil-Dependent Countries

The AON Institute, which specializes in measuring the risk levels of countries, has predicted that in 2015, due to the fall in oil prices, many oil-producing countries will face severe instability. Fereydoun Khavand explains in an interview with Mohammad Zargami how this instability will manifest in specific areas. AON is a large global institution based in London that specializes in insurance, reinsurance, and risk management. In its latest report, which has been reflected in many prominent media outlets worldwide, it states that 2015 will be a very tough year for several producers of black gold, except for the Arab countries in the Persian Gulf that have substantial foreign reserves to withstand this event. AON's research indicates that countries like Iran, Iraq, Libya, Russia, Venezuela, and other oil producers in Africa and former Soviet states will face economic and political instabilities. Economically, oil exporters face several specific risks, including the inability to repay their foreign debts, as some are heavily indebted, and the risk that their national currencies could become non-convertible to foreign currencies. In AON's assessment, Iran is also mentioned as a country whose risk level has significantly increased due to the fall in oil prices. What is the level of risk for Iran according to this institute? AON categorizes countries' risk levels into four groups: very high, high, medium, and low, placing Iran in the very high-risk category, alongside Pakistan, Afghanistan, Libya, Ukraine, Iraq, and several other countries. Is this assessment of Iran, equating it with countries like Libya and Iraq, exaggerated? An external observer considers two major variables regarding Iran: first, the heavy pressure of sanctions on the country and second, the severe drop in oil prices. However, for a more realistic assessment, other factors should also be taken into account, including that Iran's foreign debt is at a very low level and that Iran has largely adapted to difficult conditions. Certainly, the Iranian economy is in very bad shape and faces a very tough year ahead, especially if no agreement is reached regarding the nuclear issue. Conversely, an agreement on the nuclear issue could significantly lower Iran's risk level.