Ruble nears record low as Russian markets drop further on oil slump

Russia's ruble fell close to a historic low Monday as stock markets slumped on the back of the fall in oil prices following the lifting of sanctions on Iran.

The ruble dropped as low 79.43 to the dollar, nearing its record of just over 80 that it hit when the currency tumbled dramatically in December 2014.

Russia's dollar-denominated RTS index fell by some 0.93 percent by the close of trading, meaning that it has shed some 15 percent since the start of the year.

Russia -- whose energy-reliant economy has already been pushed into recession by low oil prices and Western sanctions over Ukraine -- has been rocked again by a further slump in prices.

A barrel of Brent crude dropped briefly below $28 a barrel on fears of oversupply after the international sanctions on Iran over its nuclear programme were lifted.

The National Iranian Oil Company said it had ordered production to increase by 500,000 barrels per day -- a move Tehran had long planned for once its nuclear deal with world powers took effect.

"Oil is a key driving force at the moment, and if its slide continues, the FX market will continue adjusting," analysts at Russia's VTB bank said in a statement.

Russia relies on oil and gas for over half of its budget revenues and the fresh slump in prices has already seen the government target major spending cuts as it seeks to rein in a potential deficit.