Characteristics and aspects of the oil revenue management models in Iran and the Russian Federation

Abstract

Oil revenue management is one of the most important economic issues for Iran and Russia. The importance of studying this issue is due to the fact that in recent years, the national economies of Iran and Russia have become highly dependent on oil revenues, and therefore the mechanism of their domestic economy has become highly sensitive to global fluctuations in oil prices. Therefore, macroeconomic policymakers of the two countries in recent decades have tried to increase the resilience of their national economy in the face of sharp fluctuations in world oil prices. The purpose of this article is to examine the situation of the economies of Iran and Russia during various historical oil shocks and also to discuss the strategies of the two countries in reducing dependence on oil revenues and managing oil revenues as well. The results of the study show that despite the implementation of various policies (such as the establishment of the National Development Fund of Iran in 2010 or the Stabilization Fund in Russia in 2004) both countries have weaknesses in oil revenue management. Therefore, policymakers in both countries should pay more attention to this economic challenge, especially now that they are experiencing the COVID-19 negative consequences as well as fighting Western sanctions.