• 4 minutes 2nd Annual Great Oil Price Prediction Challenge of 2019
  • 7 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 10 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 13 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 43 mins More dumbed down? re Hong Kong Act of Congress
  • 18 mins U.S. Shale Output may Start Dropping Next Year
  • 18 hours EU has already lost the Trump vs. EU Trade War
  • 24 mins U.S. Shale To Break Records Despite Bearish Rhetoric
  • 2 hours Aramco IPO magic trick
  • 21 hours Pope Proposes New Sin: Thou Shalt Not Destroy The Harmony Of The Environment
  • 17 hours What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 5 hours Winter Storms Hitting Continental US
  • 2 hours Petroleum Industry Domain Names
  • 1 hour Crazy Stories From Round The World
  • 17 hours PennEast Appealing Wacky 3rd Circuit Decision to Supreme Court
  • 23 hours Article: Did Exxon only make $39 Million onshore U.S. last quarter ?
  • 22 hours Last I Checked
  • 17 hours China 2019 - Orwell was 35 years out
ZeroHedge

ZeroHedge

The leading economics blog online covering financial issues, geopolitics and trading.

More Info

Premium Content

New Oil Price Reality Spells Doom And Gloom For These Gulf States

A few weeks ago, the IMF said something that, although it should have been obvious, seemed to surprise quite a few people. Here’s the quote from a recently released study:

Bahrain, Oman, and Saudi Arabia have medium-term fiscal gaps of some 15–25 percentage points of non-oil GDP, while conflict-torn Libya has a gap of more than 50 percent of non-oil GDP.  Related: How The Fed Has Backed Itself Into A Corner

In, contrast, CCA oil exporters have at least 15 years’ worth of available financial savings, while GCC countries are split evenly between countries with relatively large buffers (Kuwait, Qatar, and the United Arab Emirates—more than 20 years remaining) and countries with relatively smaller buffers (Bahrain, Oman, and Saudi Arabia—less than five years).

In other words, the Saudis, Oman, and Bahrain are going to go broke in “less than five years” if something doesn’t give in terms of either oil prices, budgeting, or both.  Related: This Merger Could Be A Game Changer For U.S. Pipeline Network

ImpactOfLowerPrices Related: What The Oil And Gas Industry Is Not Telling Investors

Because this represents nothing short of a seismic shift in the way we think about ME crude exporters, and because it's helpful to know just where producers need prices to go in order to avoiding racking up double-digit budget deficits, we present the following visual from Deutsche Bank which depicts breakeven prices and also summarizes where the various Mid-East producers stand (fiscally speaking) in the wake of crude's remarkable decline:

BudgetBreakevenGCC

As you can see, there's a long way to go for the Saudis and the UAE to get back into the black and indeed, even Qatar is now set to post red ink.

We're sure invading Syria would help. After all, things have gone so well in Yemen...

By Zerohedge

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play