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OPEC see US$1,000B in Crude Oil export revenue
OPEC, the Crude Oil producers' Cartel, looks to reap US$1,000B (aka US$1T) in export revenue this year for the 1st time if Crude Oil prices remain above 100 bbl, according to the International Energy Agency (IEA).
The Cartel has been one of the main beneficiaries of high Crude Oil prices, which have risen in recent weeks amid the civil uprisings in the MENA region.
Brent Light Crude traded at 115 bbl Tuesday on the ICE exchange London.
Fatih Birol, Chief Economist at the IEA, said a new assessment by the rich nations' Oil Watchdog showed that the total number of barrels exported by OPEX in Y 2011 would be slightly lower than in Y 2008, when Cartel Oil revenues reached US$990B. But if average prices remain around 100 bbl, OPEC's Crude Oil revenues will reach a record of US$1,000B this year.
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"It would be the first time in the history of OPEC that oil revenues have reached a 1T US Dollars. It's mainly because of higher prices and higher production," Birol said in a interview. "However, Saudi Arabia has made substantial efforts to calm down the Oil markets by increasing production and slowing prices from going higher."
The estimate, based on total OPEC production including Nat Gas liquids, does not take inflation into account. "Depending on your choice of specific inflation adjustment, the Y 2008 number may be slightly higher in real terms," Birol said.
Many of OPEC's largest producers are using the price gains to increase public spending to guard against popular unrest. Saudi Arabia announced a multiyear spending package of US$129B and is expected to spend about US$35B in Y 2011.
This largesse means the Country now needs a Crude Oil price of 83 bbl in order to balance its National budget this year. "The more they earn, the more they spend. So the Oil price they need is ratcheted up," said Leonidas Drollas, Chief Economist at the Center for Global Energy Studies in London.
Another beneficiary from high Crude Oil prices is Russia, and if Oil prices remain at an average of 100 bbl, Moscow's Oil and Gas revenues could increase by about US$100 to 350B, equivalent of 21% of Russia's GDP.
The IEA is concerned about the impact the current unrest is having on Oil-sector investment in the MENA region which it expects to contribute about 90% of production growth over the next 10 yrs.
Paul A. Ebeling, Jnr.
