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People took to the streets in cities in Arab Gulf oil producer Oman this weekend and on Monday in protest over the poor economy and lack of jobs, the Associated Press reports.
Oman, a non-OPEC oil producer but part of the OPEC+ alliance, has been hit very hard by the oil price and demand crash in 2020, and is looking to raise additional funding while cutting government expenditures. According to the latest assessment by the International Monetary Fund (IMF) in its regional outlook published last month, Oman’s fiscal breakeven oil price –the oil price at which the fiscal balance is zero – is projected at $72.30 this year, and at $61.80 next year.
Oman, unlike some other oil producers in the Gulf, cannot afford too generous benefits to state workers and other employees and is struggling with youth unemployment—a situation exacerbated by last year’s oil price shock to Oman’s state finances.
According to tweets seen by the AP, there have been protests and massive police presence in many cities across Oman, including in the key port city of Sohar.
It wasn’t immediately clear if there had been massive layoffs at industries in Sohar and other cities, the AP notes, while the government and the state media are not reporting about the protests or the presence of riot police, photos of which have been circulating on Twitter.
The 2020 shocks “took a heavy toll on the economy in 2020,” the International Monetary Fund (IMF) said in a brief on Oman earlier this year.
Oman’s fiscal deficit was expected to double to 18 percent of gross domestic product (GDP) in 2020, before narrowing to 7 percent of GDP by 2024, Fitch Ratings said in December, warning that Oman’s fiscal plan faced large implementation and funding risks.
Last month, Bloomberg reported that the government of Oman was looking at several options to plug the widened budget hole, including selling a stake in state oil firm OQ via an initial public offering (IPO).
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.