GCC countries expected to lose $100B due to low oil prices

Arab World Materials 29 July 2016 13:02 (UTC +04:00)

Baku, Azerbaijan, July 29

By Aygun Badalova - Trend:

Fiscal balances in MENA oil exporters swung from a surplus of $128 billion in 2013 to a deficit of $264 billion in 2016, according to the World Bank’s latest MENA Quarterly Economic Brief, “Whither Oil Prices?” report.

The group of Gulf Cooperation Council (GCC) countries lost $157 billion in oil revenues last year and is expected to lose another $100 billion this year, the report said.

Saudi Arabia has depleted $178 billion in reserves, followed by Algeria ($28 billion), and Iraq ($27 billion) in 2015.

Oil revenues have been falling for the third year in a row with fiscal deficits and debts rising. At the same time, several countries - Libya, Iraq, Syria and Yemen- are dealing with the devastating impact of civil war and forced displacement, exacerbating pressure on already tight budgets, the report said.

Oil prices are still up about 60 percent from 12-year lows of $26-$27 in the first quarter. But the rally has faded since they breached $50 in May.

For 2015, the US Energy Information Administration (EIA) estimates that members of OPEC earned about $404 billion in net oil export revenues (unadjusted for inflation).

This represents a 46% decline from the $753 billion earned in 2014, mainly as a result of a precipitous fall in average annual crude oil prices during the year, and to a lesser extent to decreases in the level of OPEC net oil exports. This revenue total was the lowest earnings for OPEC since 2010.

EIA projects that OPEC net oil export revenues could fall further to about $341 billion dollars (unadjusted for inflation) in 2016.