Middle East Economies Wait For Oil To Go Back Up

Across the Middle East, most economies have been hurt in some way by the sharp decline in oil prices. Big oil producers had large cash reserves to help ease the financial trauma, but the region's poorer states are being hit harder. Mohammed Ali Zeini, a senior energy analyst at the Center for Global Energy Studies in London, talks with Renee Montagne about how the region if faring.

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RENEE MONTAGNE, host:

Across the Middle East, almost every economy has been hurt by the sharp decline in oil prices, though not every country has been hurt the same. The big oil producers have large cash reserves to help ease the current financial trauma. The region's poorer states don't have that cushion. To find out more, we called Mohammed Ali Zeini. He's a senior energy analyst at the Center for Global Energy Studies in London.

Mr. MOHAMMED ALI ZEINI (Senior Energy Analyst, Center For Global Energy Studies): In general, I mean in the Middle East and also North Africa, these countries already live on oil production and exports. And oil revenues in these countries finance the major parts of their government budgets. It's okay now with Saudi Arabia and the United Arab Emirates and Kuwait and others, but the rest of the countries like Iran, Iraq, also the smaller producers like Syria, Egypt, they are in bad shape. I think that - yeah.

MONTAGNE: Would that - let me break it down a little bit. What does this mean for these poorer countries that produce oil - and now, the oil price is down so much - for ordinary people?

Mr. ZEINI: The impact on them is that in these countries, the government is the first biggest employer. And when there is not enough money, then they can't take them and employ them.

MONTAGNE: What is happening to poorer countries that we, in a sense, don't even think of as poor? There are important countries, or powerful countries - Iran, Iraq - but who didn't really have much of a cushion, have lots of oil, but were relying quite heavily on those oil revenues. What is happening to their economies?

Mr. ZEINI: Well, really, the biggest casualty is Iraq, because Iraq's economy is in very bad shape - I mean that all sectors of the economy are not working because of the ongoing violence. So the whole economy, or the government, is almost entirely dependent on oil revenues.

MONTAGNE: And then Iran, what is happening in Iran?

Mr. ZEINI: In Iran, the situation is a little better. You know, they have agriculture. They have manufacturing. But still, Iran depends on oil for a large extent. They do not seem to have a big cushion in terms of foreign exchange, like, I mean, the Gulf countries do.

MONTAGNE: Mohammed Ali Zeini is senior energy economist and analyst at the Center for Global Energy Studies in London. Thanks very much for talking with us.

Mr. ZEINI: You are welcome.

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