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October 23, 2021

Opec set for USD 1,000 bln in export revenues

Opec, the Crude Oil Producers’ Cartel, will reap USD 1,000 bln in export revenues this year for the first time if crude prices remain above USD 100 a barrel, according to the International Energy Agency (IAE), Financial Times informs, quoted by Mediafax. Brent crude was trading at USD 115 a barrel on Tuesday. Fatih Birol, chief economist at the IEA, said a new assessment by the rich nations’ oil watchdog showed that the total number of barrels exported by Opec in 2011 would be slightly lower than in 2008, when cartel oil revenues reached USD 990 bln. But if average prices remain around USD 100 a barrel, Opec’s oil revenues will still reach a record of USD 1,000 bln this year. “It would be the first time in the history of Opec that oil revenues have reached a trillion dollars. It’s mainly because of higher prices and higher production,” Birol said in a interview for the British business newspaper. “However, Saudi Arabia has made substantial efforts to calm down the oil markets by increasing production and hinder prices from going higher.” The estimate, based on total Opec production including natural gas liquids, does not take inflation into account. “Depending on your choice of specific inflation adjustment, the 2008 number may be slightly higher (in real terms),” Birol said. Many of Opec’s biggest producers are using the price gains to increase public spending, partly to guard against popular unrest. Saudi Arabia announced a multiyear spending package of USD 129 bln and is expected to spend about USD 35 bln in 2011. Another beneficiary from high oil prices is Russia. Birol noted that if oil prices remain at an average of USD 100 a barrel, Moscow’s oil and gas revenues could increase by about USD 100 bln to USD 350 bln – equivalent to 21 per cent of Russia’s GDP. High oil prices have “started to hurt the global economy”, Birol said, adding that he is “very worried for OECD countries, especially Europe”. The IEA is also concerned about the impact the current unrest is having on oil-sector investment in the Middle East and North Africa, which it expects to contribute about 90 per cent of production growth over the next 10 years. “For this to happen, we need to invest now but I see the current geopolitical situation as a major handicap for making the right amount of investments,” Birol said.

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