The dropping oil prices and the implications for Armenia





How will the change in oil prices affect the region, in general, and Armenia, in particular? Economist Babken Tunyan’s predictions are not optimistic.

Speaking to reporters today, he said “the economic instability in Russia caused by dropping oil prices continues. Therefore, Armenia cannot expect anything good.”

The economist said Azerbaijan, whose economy heavily depends on oil production, faces serious problems because of the dropping oil prices. The country has even declared that oil production will simply stop should the price fall below $30. The drastic cut in revenues envisages cuts in the military budget. How will this affect the situation at the Armenian-Azerbaijani border?

“Tension at the border will be maintained. They will try to divert the public attention from social problems by raising tensions at the border. This is what the experience of the past years shows,” Babken Tunyan said.

The developments of the past months make it clear that any country can face serious economic problems irrespective of the amount of natural resources, if the economic system is a ‘prehistoric’ one.

“Time has shown that all developments connected with oil are unpredictable. One year ago it would be absurd to assume that the oil price could fall from $100 to $30, while some prediction suggest it could drop to 10-15 USD,” the economist added.

According to him, the lifting of sanctions against Iran will only accelerate the process. Therefore, nothing should be excluded.

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