• 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
  • 3 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 7 days Does Toyota Know Something That We Don’t?
  • 20 hours America should go after China but it should be done in a wise way.
  • 7 days World could get rid of Putin and Russia but nobody is bold enough
  • 9 days China is using Chinese Names of Cities on their Border with Russia.
  • 10 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 10 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 10 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 9 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 11 hours How Far Have We Really Gotten With Alternative Energy
  • 10 days Putin and Xi Bet on the Global South
  • 10 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 11 days United States LNG Exports Reach Third Place
  • 11 days Biden's $2 trillion Plan for Insfrastructure and Jobs
Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Premium Content

Saudi Arabia’s Breakeven Oil Price To Drop To $65 Next Year

Higher oil prices and an expected rebound in the global economy and oil demand are set to lower the fiscal breakeven oil price of the major Middle Eastern oil producers this year and next, with the breakeven oil price for Saudi Arabia dropping to $65.70 in 2022 from $77.90 in 2020, the International Monetary Fund (IMF) said.

In its regional economic outlook published on Sunday, the IMF forecasts that all oil exporters from the Middle East and North Africa (MENA)—except for Iran—will see their fiscal breakeven oil price, the oil price at which the fiscal balance is zero, lower in 2022 compared to previous years.

The expectations are based on assumptions that the authorities will keep the current policies in place and that the simple average of the Brent, Dubai Fateh, and WTI crude oil prices would be $52.64 a barrel in 2021 and $50.07 a barrel in 2022.

In the case of Saudi Arabia, the fiscal breakeven oil price is set to drop to as low as $65.70 next year, compared to $76.20 this year, and a high as $81.90 in the last pre-pandemic year 2019, according to the IMF.

Saudi Arabia, however, is not the producer with the lowest breakeven prices. To compare, the United Arab Emirates (UAE) is set to see its fiscal breakeven oil price at $60.40 next year, down from $68.20 in 2020 and $64.60 this year. Related: Morgan Stanley: Oil Prices Stuck In $60 Range This Summer

Qatar’s breakeven oil price is expected to drop to as low as $40.40 in 2022, from $46.20 in 2020 and $43.10 in 2021. Qatar has the lowest fiscal breakeven oil price among all MENA oil-exporting countries.

While lower fiscal breakeven price is good news for all oil-dependent economies to balance their budgets, climate change and the energy transition are creating new challenges for the Middle Eastern petrostates, the IMF said.

“The region’s oil exporters face the additional challenge of making the transition away from oil dependence as the world progressively shifts away from fossil fuels. Rebuilding financial buffers and pursuing economic and fiscal diversification while ameliorating any negative distributional impact on households, are key policy priorities in this regard,” the IMF noted.  

By Charles Kennedy for Oilprice.com

ADVERTISEMENT

More Top Reads from Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

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