Via Stratfor (subscription required), an interesting analysis of the impact that falling oil prices could have upon both Russia’s and Iran’s domestic expenditures on social and economic programs.  At the article notes

“…Russian Finance Minister Alexei Kudrin announced Nov. 12 that the government was revising down its oil-price forecast for future budgeting decisions. Specifically, the 2009 forecast would be dropped from $95 to $50 per barrel, the 2010 forecast from $90 to $55 per barrel and the 2011 forecast from $88 to $60 per barrel.

The issue of needing to learn to operate with less cash was also tossed around in Iran, albeit it at a level far below that of finance minister. The rapporteur of the parliament’s Energy Commission, Ali Adyani-Rad, noted Nov. 12 that, “After consultations, Iranian lawmakers have agreed that a price base of $40 and a maximum price of $50 for oil should be set in the next year, beginning March 21, 2009.”

Such statements are the first sign that oil exporters anywhere in the world are beginning to take practical steps to adjust for the catastrophic drop in oil prices of the past three months. Crude prices have fallen more than 60 percent since their July peak. For Iran, this translates into a daily reduction of income of approximately $220 million; for Russia the figure is roughly $600 million.

So far, however, reducing their forecasts has not actually impacted government spending levels in Russia or Iran. For Iran, the issue is largely one of social stability. Only roughly half of the Iranian population is ethnically Persian, and keeping everyone happy is not cheap. Add in an ongoing power struggle between President Mahmoud Ahmadinejad and his rivals in the lead-up to presidential elections in June 2009, and spending one’s way to popularity is a difficult path to depart. In Russia’s case, the issue is less social stability and more financial stability. The global financial crisis has crushed the Russian economy’s ability to function at a fundamental level — at the start of the crisis the Russian economy was utterly dependent on foreign financing — and the government has found itself needing to redirect rivers of cash to keep the system running. Simply put, neither state can afford to spend less money right now, so there is a stickiness in the decision-making process.

In this the Russians have a definite advantage over the Iranians, who have not been saving much of anything. Under the stewardship of Vladimir Putin (formerly president, now prime minister, but undeniably still in charge of everything of importance), the Russian government has socked away a great deal of its oil income for emergencies just like this. (Actually, to give credit where credit is due, Putin acted on Kudrin’s recommendations.) Even with the massive drawdown of those reserves in the past several weeks, Russia still has about $650 billion in cash on hand — including $134 billion in a reserve fund specifically designed to provide money for the budget in the case of a precipitous fall in energy prices.

But some adjustments will undoubtedly need to be made. The 2008 Russian budget had total expenditures of 6.4 trillion rubles (US$230 billion). If spending could be held at that level, the reserve fund would prove more than adequate. But at present, the 2009 budget envisions spending 10.9 trillion rubles (US$395 billion). If oil prices simply hold where they are (at US$58 a barrel today), then the $134 billion reserve fund would be reduced to about $43 billion in just a year. All in all, the difference between an average annual price of $95 a barrel and $50 a barrel comes to $110 billion — not exactly couch change even for a (currently) cash-rich Kremlin.”