US$1,000Billion revenue in crude oil exports for OPEC

Fatih Birol, IEA_US$1,000Billion crude oil revenue for OPEC

Fatih Birol, IEA_US$1,000Billion crude oil revenue for OPEC

The Crude Oil producers’ Cartel OPEC,, is expecting a record US$1,000B (aka US$1T) in export revenue, a historic landmark for the cartel, if Crude Oil prices remain higher than 100 bbl, said the International Energy Agency.

The crude oil market has seen a very nervous fortnight because of the recent uprisings in the Middle East and North Africa region. Fortunately for OPEC, it has been one of the main beneficiaries of the resultant high oil prices.

“It would be the first time in the history of OPEC that oil revenues have reached a 1T US Dollars. It’s mainly because of higher prices and higher production,” said Fatih Birol, Chief Economist at the IEA, in a interview. “However, Saudi Arabia has made substantial efforts to calm down the oil markets by increasing production and slowing prices from going higher.”

MENA Unrest, OPEC’s gain

The total number of oil barrels exported by OPEC in 2011 would remain slightly lower than the number of barrels exported by the cartel in 2008, when Cartel Oil revenues reached US$990B, according to a new assessment by the rich nations’ Oil Watchdog, said Birol. This ballpark figure, does not take inflation into account, and is based on total OPEC production including Nat Gas liquids.

And despite this, IEA estimates OPEC’s Crude Oil revenues will reach a record of US$1T this year as long as average crude prices remain around 100 bbl.

Many of Opec’s biggest producers are using the price gains to increase public spending, partly to guard against popular unrest. Of the $129bn multiyear spending package announced by Saudi Arabia, about $35bn is expected to be spent in 2011.

A consequence of this, according to the Chief Economist at the Center for Global Energy Studies in London, Leonidas Drollas, will be that the country will now require a Crude Oil price of 83 bbl so as to balance their National budget for the year.

Essentially, like Drollas said in his statement, “the more they earn, the more they spend. So the Oil price they need is ratcheted up”.

Russia’s Oil & Gas

Alongwith OPEC, a higher than 100 bbl average crude oil price is also likely to benefit Russia, with revenues of Moscow’s Oil and Gas estimated to increase by about US$100B to 350B.

This rise would be equivalent to 21% of Russia’s Gross Domestic Product.

According to Mr Birol, rising oil prices have “started to hurt the global economy”. He added that he was particularly worried for OECD countries, especially Europe.

With the Middle East and North Africa region expected to contribute to about 90% of the oil-sector production growth, the International Energy Agency has reported its concerns about the impact the current unrest is having on oil-sector investment over the coming years.

Mr Birol of the IEA said “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”.

Avatar
Carrie Ann
Carrie Ann is Editor-in-Chief at Industry Leaders Magazine, based in Las Vegas. Carrie covers technology, trends, marketing, brands, productivity, and leadership. When she isn’t writing she prefers reading. She loves reading books and articles on business, economics, corporate law, luxury products, artificial intelligence, and latest technology. She’s keen on political discussions and shares an undying passion for gadgets. Follow Carrie Ann on Twitter, Facebook

Recent Posts

Babcock facing writedowns of £1.7 billion, plans to cut 1000 jobs

Babcock facing writedowns of £1.7 billion, plans to cut 1000 jobs

Babcock International Group PLC, the UK defense contractor, said that a comet review for the financial year ending March 21 had identified impairments and charges totaling approxim
6 hours ago
France’s water management utilities, Veolia and Suez, finally merge after long battle

France’s water management utilities, Veolia and Suez, finally merge after long battle

Veolia and arch-rival Suez, the two French waste management utility companies, have struck a deal worth nearly 13 billion euros ($15.44 billion)to merge after months of wrangling.
1 day ago
Impossible Foods mulling IPO at $10 billion valuation

Impossible Foods mulling IPO at $10 billion valuation

Impossible Foods, the makers of the widely popular plant-based burgers, plans to go public with a likely valuation of $10 billion. The vegan burger company was valued at $4 billion
1 day ago
Aramco sells minority stake to EIG Group-led consortium for $12.4 billion

Aramco sells minority stake to EIG Group-led consortium for $12.4 billion

Energy giant Saudi Aramco is selling a minority stake for 12.4-billion-dollar in a newly formed oil pipeline business to a consortium led by US-based EIG Global Energy Partners. Th
1 day ago
Elior acquires Nestor, the single meal food delivery startup

Elior acquires Nestor, the single meal food delivery startup

Elior, the corporate catering company, has acquired the French startup Nestor for an undisclosed amount. Nestor, a Paris, France-based food delivery service, started in 2015 with a
4 days ago
Axa gears to buy office space worth €800m in European cities

Axa gears to buy office space worth €800m in European cities

Axa Investment Managers, the French fund house, is not too worried about predictions that the post-pandemic world will see more people working from home and office real estates shr
4 days ago