Friday 2 January 2015

Azerbaijan: How Will Baku Handle the Oil Price Slide? | News | The Moscow Times

Azerbaijan: How Will Baku Handle the Oil Price Slide? | News | The Moscow Times:



""Azerbaijan is not afraid of $60 per barrel," a headline on the pro-government Azerbaijani news site Trend proclaimed recently. But with Brent crude oil, the benchmark for the oil market, now hovering around $60 a barrel, Baku might well have something to fear.



Baku's 2015 state budget was calculated based on an oil price of $90 per barrel. About 53.5 percent of the government's roughly 19.4-billion-manat ($24.8 billion) budget comes from the State Oil Fund, a government-run piggy bank that controls money generated by Azerbaijan's oil projects, and about some 20 percent from the taxes paid by oil-sector companies, according to analysts.



The government, for now, maintains that the budget can handle lower oil prices. Eventually, officials believe those prices will rise again."



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