OPEC’s crude oil export revenues for 2020 could decline to $323 billion, the U.S. Energy Information Administration said in a new report, noting that this would be the lowest revenue level in 18 years.
This would compare to $595 billion in oil revenues for 2019, the authority added.
Unsurprisingly, the biggest chunk of OPEC’s collective oil revenues for 2020 will be for Saudi Arabia as the biggest exporter in the cartel. For 2019, Saudi Arabia’s oil revenues totaled $202 billion—more than a third of the total—but last year’s revenues will be hit by the pandemic like those of its fellow OPEC exporters.
Like other forecasters, the EIA warned the lower oil revenues will have a strong negative impact on OPEC economies.
“The decrease in revenues could be detrimental to member countries’ fiscal budgets, which rely heavily on oil sales to import goods, fund social programs, and support public services,” the authority said.
OPEC itself is guardedly optimistic about the immediate future, however. Despite substantial deficits and a surge in loans to prop up budgets, the cartel expects oil demand to begin recovering this year.
In its latest Monthly Oil Market Report, the cartel forecast oil demand this year to rise by 5.9 million bpd, to reach 25.9 million bpd. The biggest drivers, again, would be Asian economies, where demand is seen jumping by 3.3 million bpd from 2020 when OPEC estimated it had fallen by as much as 9.8 million bpd.
The group was rather upbeat on demand trends in North America, despite the raging pandemic, noting that “The recovery in transportation fuels, including gasoline, is additionally linked to developments in the labour market and gasoline retail prices. The current outlook assumes a respectable recovery in both variables.”
Its outlook for European oil demand was less upbeat, as it noted the continent’s struggle to contain the spread of infection and the lockdowns that have sapped oil demand.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- Big Oil Watches In Fear As SEC Probes Exxon's Permian Valuation
- Why Oil Will Keep Rising In 2021
- Goldman Sachs Warns Of Bullish Perfect Storm For Natural Gas