• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 22 hours The United States produced more crude oil than any nation, at any time.
  • 6 days e-truck insanity
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 5 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 5 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 5 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 6 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 6 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 10 days Bankruptcy in the Industry
Biden Administration's SPR Plans Derailed by Oil Price Surge

Biden Administration's SPR Plans Derailed by Oil Price Surge

The Biden Administration cancels planned…

Big Oil Criticized for Falling Short of Net-Zero Goals

Big Oil Criticized for Falling Short of Net-Zero Goals

Climate Action 100+ criticizes Big…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Oil Nations Could See Income Crash By Up To 85 Percent In 2020


The coronavirus pandemic and collapsing oil prices will slash the oil and gas revenues of vulnerable oil-reliant developing economies by up to 85 percent, the heads of OPEC and the International Energy Agency (IEA) said in a joint statement as a growing number of countries are going into lockdown and oil demand is set to take an unprecedented hit.  

Fatih Birol, the Executive Director of the IEA, and OPEC’s Secretary General Mohammad Barkindo spoke on the phone to discuss the current oil market situation and the potential impact of depressed demand and low oil prices on the global economy and on oil-producing nations with vulnerable economies.

“[I]f current market conditions continue, their income from oil and gas will fall by 50% to 85% in 2020, reaching the lowest levels in more than two decades, according to recent IEA analysis. This is likely to have major social and economic consequences, notably for public sector spending in vital areas such as healthcare and education,” OPEC and the IEA said in a joint release.

Last week, both OPEC and the IEA slashed their projections for oil demand this year, expecting zero and even negative growth in demand amid significant economic slowdown as the coronavirus spreads around the world. Global oil demand is set to drop this year for the first time since the financial crisis in 2009, the IEA said as it slashed its demand outlook by 1.1 million bpd. The IEA now sees global demand falling by 90,000 bpd year on year in 2020. Related: Largest Oil Glut In History Could Force Crude Prices Even Lower

OPEC, for its part, now sees global oil demand rising by mere 60,000 bpd in 2020 after it slashed its forecasts by 920,000 bpd from last month’s assessment.

On Friday, Birol tweeted that “Recent history shows that playing Russian roulette with the US shale industry through an oil ‘price war’ can backfire. The major victims are likely to be people in developing countries that still rely heavily on oil & gas revenues to fund their social & economic systems.”

The oil price war that OPEC’s top producer and de facto leader Saudi Arabia started will hurt the fiscal revenues of the oil producers in the Persian Gulf too, including those of Saudi Arabia, analysts say.

By Tsvetana Paraskova for Oilprice.com


More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Mamdouh Salameh on March 17 2020 said:
    The coronavirus outbreak could go into history as the largest destructive event that has hit the global economy since the Six-Day War in 1973. Indeed its adverse impact could be bigger than either the financial crisis of 2008 or the 2014 oil price crash.

    Whilst both the financial crisis of 2008 and the 2014 oil price crash very adversely affected the global oil economy, the outbreak has brought normal economic activities of the global economy to a virtual standstill in addition to the immense damage inflicted so far on the global economy.

    The Arab Gulf oil producers, for instance, earned $574 bn in net oil export revenues in 2013. My calculations show that they earned an estimated $452 bn in 2014, down 21% on 2013 earnings and an estimated $340 bn in 2015 based on an average oil price of $60/barrel.

    Without the coronavirus outbreak, the Arab Gulf oil producers would have earned $369.30 bn this year based on an average price of $60. The outbreak and the resulting oil price collapse are projected to cost them the loss of $203.12 bn or 55% of their revenues.

    If the Saudi price war against Russia causes the oil price to collapse further to $25, a real possibility, the revenue loss could rise to 62.47% with Saudi Arabia accounting for $100 bn or 43.29% of the total. To this could be added another loss of $200 bn being a 10% devaluation of Saudi Aramco’s shares raising total Saudi loss to $300 bn. This figure is four times bigger than projected Saudi oil revenues in 2020 based on an oil price of $30.

    This is the punitive price Saudi Arabia could be paying for its rash decision to start a price war.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • smooth rough on March 17 2020 said:
    Cooperation gets better results than competition. Why sell for less when you could do the same thing and sell for more?

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News