Oil producing countries are scrambling to fill gaping holes in their budgets torn by crashing petroleum prices, with some turning to international lenders for help and others slashing spending. Austerity measures, loan negotiations and state asset sales are all on the menu of moves deployed to counter the brutal nosedive in the oil price, a drop of about 70 percent since June 2014.
In Russia, which depends on oil and gas sales for half of government revenues, Economy Minister Alexei Ulyukayev on Tuesday warned that his country's budgetary situation was "critical" and that it was now urgent to implement a privatisation programme that is expected to feature sales of stakes in state-owned companies such as oil giant Rosneft.
Last month, the International Monetary Fund warned that the sharp collapse in the price of oil is proving more of a drag on the global economy than a stimulus, pointing to the dire budgetary situation that oil exporting countries now find themselves in. There are big differences between the various oil-exporting countries, many of whom had accumulated vast dollar reserves while the going was good in the commodities markets.
But even the world's biggest exporter, Saudi Arabia, is feeling the pain. The kingdom reported this week that its fiscal reserves dropped to a four-year low of $611.9 billion last year, from $732 billion in 2014, as the government sought to finance a budget deficit caused by plunging oil revenues.
Venezuela, which is sitting on the biggest known oil reserves from which it derives 96 percent of its foreign revenues, has been devastated by the drop in prices. Increasingly desperate, the South American country's oil minister, Eulogio del Pino, last week started a whistle stop tour of Russia, Qatar, Iran and Saudi Arabia to lobby in favour of measures to stop the price decline. But several OPEC countries, lead by Saudi Arabia, have resisted calls to cut production, preferring to defend their market share rather than prices.
