Iran General NewsOil price weakness pressures Iran, Venezuela -CIA

Oil price weakness pressures Iran, Venezuela -CIA

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ImageReuters: Weak global oil prices threaten to destabilize major oil producers Iran and Venezuela, but Russia is better able to manage because of its sovereign investments, CIA Director Michael Hayden said on Thursday.

By Randall Mikkelsen

WASHINGTON, Jan 15 (Reuters) – Weak global oil prices threaten to destabilize major oil producers Iran and Venezuela, but Russia is better able to manage because of its sovereign investments, CIA Director Michael Hayden said on Thursday.

"Here's one (event) that's destabilizing, but it could be positive," Hayden told reporters.

He said global prices hovering around $40 per barrel could increase the bite of sanctions aimed at persuading Iran to give up its nuclear program, and could shake the government of Venezuelan President Hugo Chavez, who has been an irritant to U.S. policy in Latin America.

Hayden said a $40 oil per barrel oil price would translate to about $30 per barrel for the high-sulfur grade Venezuela produces. "That's real trouble for that (Chavez) regime — so you could see a lot of fracturing there," he said.

"Iran … could real challenges here, when you combine it with inflation and the fact that they're having an upcoming presidential election," he said.

"It removes a buffer that they have had enjoyed recently and will cause what I think are natural stresses within Iranian society to become more pronounced, which then … removes the buffer from the impact of some sanctions, removes the buffer from the impact of international isolation," he said.

He said he believed Iran was nearing the point where it must decide whether to continue with its nuclear program, and whether it was worth the diplomatic and other costs. 

On the other hand, he said, "Russia has invested so wisely and has such a such a huge sovereign wealth fund that they could probably manage this most easily."

Venezuela is the fourth largest exporter of oil to the United States, providing about 10 percent of its oil supply. (Editing by Jackie Frank)

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