Rude Awakening

Deputy Chief Editor
Rude AwakeningRude Awakening

Those relying on oil revenues are in for a rude awakening since summer. The international price of crude has tumbled more than 35 percent since June and there is simply nothing to indicate that the slide will be arrested anytime soon. Even before crude started the dangerous downward spiral, observers and social scientists across the sociopolitical spectrum, aware of what would lie ahead, had been begging for effective measures to change course.

 Almost all were and are of the belief that extracting oil from the ground and selling it cannot be called an economy. It is obvious that all those calls and appeals fell on deaf ears. Now we are stuck between a rock and a hard place. The global oil market is saturated and the once energy-hungry nations don't seem to be in any rush to hoard the black gold because their economies are not doing well as the appeal of renewable energy is slowly but steadily becoming a policy in many capitals.

For decades the lives of most Iranians have been shaped by the excessive but not hard-earned oil export income. Lifestyles of the masses and that of politicians, political  leaders, the top brass, officials and directors of state-run and affiliated organizations has been, and is,  under the direct influence of oil. The disconnect between rulers and the ruled and the disturbing pattern of unbridled consumerism are only two consequences of spending oil revenues in an apparently haphazard and unsustainable manner.

Oil windfalls, at least over the past four decades also have had its effect on foreign policy. The major oil producers, especially in the Middle East, have used their multi-billion-dollar oil earnings to fulfill their goals and also shape the policies of other nations. The significant rise in international oil prices in the more recent past, however, has not been an occasion for celebration.

As the going got tough for importers, it set in motion a frantic search for ways to replace the fossil fuels. Whether or not the replacement was environmentally friendly is a different matter! The United States was among the early comers on the scene due largely to its unusually high consumption of petroleum and other oil derivates. The floodgates opened for what came to be known as shale oil, opposed to and in rivalry with, the old-timer crude oil.

Saudi Arabia, as the biggest oil producer in the world up until last year, is said to be on a collision course with shale. Although a clear winner has yet to emerge in the newest battle for a bigger oil market share, the downward spiral in crude prices has already taken its toll on Iran, Russia and Venezuela, to name a few.

Then there is the extra heavy burden of economic and banking sanctions imposed on Iran because of the disputed nuclear program. It has become crystal clear to the Iranians at large and powerhouses in Tehran that an uncertain future lays ahead for oil and everything related to this strategic but now highly volatile export product.

In light of what is rapidly unfolding on our slippery doorstep, the demand of wisdom is to embark on the difficult but inevitable terrain of slowly separating oil from everyday life and business of Iranians. It is only a matter of time before oil revenues, once the bulwark of development and economic prosperity, will have to take a back seat in Iran's national budget.  The process began on Sunday when President Hassan Rouhani submitted his $82 billion draft budget to the Majlis in which the share of oil earnings is not more than 33 percent.

The writing is on the wall: Diminishing oil export revenues, no matter how painful in the short-term, will benefit Iranians in the long-range and convey the belated message that in today's competitive world there can no more be something for nothing.