Low Oil Prices a Tough Balancing Act for Petrostates

Soaring oil prices gave the world’s big crude producers a relatively easy ride for much of the

last decade. But the dramatic slump in prices in the last year proved a nasty shock to the system that left many petrostates struggling to balance their budgets. (OPEC Meeting: Follow our live blog). It’s a painful adjustment. The IMF said last month that the fall in anticipated oil export earnings would amount to $287 billion for Gulf Cooperation Council countries and turn a long-standing current account surplus among oil exporters in the Middle East, North Africa, Afghanistan and Pakistan into a $22 billion deficit this year. Petrostates have responded in different ways to the crash, with some forced to cut spending and devalue their currencies to mitigate the impact of lower oil export revenues. Others, with more substantial fiscal buffers can afford to adjust more slowly. The world’s largest oil exporter, Saudi Arabia, has increased public spending.

That’s reflected in the oil price the countries need to fund government spending. According to data published in May by Deutsche Bank DBK.XE -2.33%, Nigeria and Russia have seen a dramatic decline in their fiscal breakeven oil price, helped by the devaluation of the naira and ruble. The bank predicts that Nigeria needs oil prices of $87.90 a barrel to balance its budget this year this year, down from $118.50 a barrel in 2014. Russia can get by with oil at $78 a barrel, down from $102 a barrel last year. Ultimately though, Kuwait and Qatar will be the only two emerging market oil producers to run a budget surplus this year, Deutsche Bank said.

 

Libya

Break-even price$215.00

2014 production in barrels/day¹0.52 million

 

Price per barrel	Net exports (% GDP)²
June high$115.06	47.4%
Current$64.66	26.7%
Loss in export value	$13.61 billion

¹ Includes crude, natural-gas liquids and condensates.  ² 2013 exports, latest available, measured as percentages of 2013 GDP.

 

 

 

 

Algeria

Break-even price$111.10

2014 production in barrels/day¹1.72 million

Price per barrel	Net exports (% GDP)²
June high$115.06	27.6%
Current$64.66	15.5%
Loss in export value	$25.21 billion

¹ Includes crude, natural-gas liquids and condensates.  ² 2013 exports, latest available, measured as percentages of 2013 GDP.

Saudi Arabia

Break-even price$103.00

2014 production in barrels/day¹11.62 million

Price per barrel	Net exports (% GDP)²
June high$115.06	49.2%
Current$64.66	27.7%
Loss in export value	$160.47 billion

¹ Includes crude, natural-gas liquids and condensates.  ² 2013 exports, latest available, measured as percentages of 2013 GDP.

 

Iran

Break-even price$92.50

2014 production in barrels/day¹3.38 million

Price per barrel	Net exports (% GDP)²
June high$115.06	14.4%
Current$64.66	8.1%
Loss in export value	$23.99 billion

¹ Includes crude, natural-gas liquids and condensates.  ² 2013 exports, latest available, measured as percentages of 2013 GDP.

 Venezuela

Break-even price$89.00

2014 production in barrels/day¹2.69 million

Price per barrel	Net exports (% GDP)²
June high$115.06	37.3%
Current$64.66	21.0%
Loss in export value	$35.67 billion

¹ Includes crude, natural-gas liquids and condensates.  ² 2013 exports, latest available, measured as percentages of 2013 GDP.

Nigeria

Break-even price$87.90

2014 production in barrels/day¹2.43 million

Price per barrel	Net exports (% GDP)²
June high$115.06	16.8%
Current$64.66	9.4%
Loss in export value	$38.41 billion

¹ Includes crude, natural-gas liquids and condensates.  ² 2013 exports, latest available, measured as percentages of 2013 GDP.

Russia

Break-even price$78.00

2014 production in barrels/day¹10.85 million

Price per barrel	Net exports (% GDP)²
June high$115.06	14.7%
Current$64.66	8.2%
Loss in export value	$133.48 billion

¹ Includes crude, natural-gas liquids and condensates.  ² 2013 exports, latest available, measured as percentages of 2013 GDP.

United Arab Emirates

Break-even price$73.10

2014 production in barrels/day¹3.47 million

Price per barrel	Net exports (% GDP)²
June high$115.06	28.6%
Current$64.66	16.1%
Loss in export value	$50.43 billion

¹ Includes crude, natural-gas liquids and condensates.  ² 2013 exports, latest available, measured as percentages of 2013 GDP.

Iraq

Break-even price$70.90

2014 production in barrels/day¹3.37 million

Price per barrel	Net exports (% GDP)²
June high$115.06	41.6%
Current$64.66	23.4%
Loss in export value	$42.37 billion

¹ Includes crude, natural-gas liquids and condensates.  ² 2013 exports, latest available, measured as percentages of 2013 GDP.

Qatar

Break-even price$59.10

2014 production in barrels/day¹2.05 million

Price per barrel	Net exports (% GDP)²
June high$115.06	37.9%
Current$64.66	21.3%
Loss in export value	$33.72 billion

¹ Includes crude, natural-gas liquids and condensates.  ² 2013 exports, latest available, measured as percentages of 2013 GDP.

 

Kuwait

Break-even price$47.10

2014 production in barrels/day¹2.78 million

Price per barrel	Net exports (% GDP)²
June high$115.06	55.9%
Current$64.66	31.4%
Loss in export value	$43.05 billion

¹ Includes crude, natural-gas liquids and condensates.  ² 2013 exports, latest available, measured as percentages of 2013 GDP.

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Source of data: -->WSJ