Gulf states expected to earn a lot less from oil exports this year

Oct 10, 2001 02:00 AM

Gulf states are expected to earn around $ 107.6 bn from oil exports this year but the figure is far below last year's income, according to independent estimates. The decline in the revenues of the six-nation Gulf Cooperation Council (GCC) is a result of a drop in average crude prices that hit one of their highest levels last year, showed a report by the London-based Centre for Global Energy Studies (CGES).
GCC countries, which control 45 % of the world's proven crude wealth, earned $ 130 bn in 2000 as healthy global economy and an OPEC price campaign drove average prices to their highest level in 18 years. "This year's earnings by the GCC and OPEC as a whole will be lower because prices are lower," Dr Leo Drollas, CGES's deputy director, told.

A breakdown showed the world's oil powerhouse Saudi Arabia is projected to earn around $ 60.1 bn this year compared with $ 72.9 bn in 2000. The UAE's revenues are forecast to decline to $ 17.9 bn from $ 21.6 bn, in line with the overall GCC figures.
Those of Kuwait will slide to $ 15.5 bn from $ 18.7 bn, and Qatar's to $ 5.8 bn from $ 6.9 bn. As for non-OPEC Oman, Gulf banks figure earnings will drop to $ 7.3 bn from $ 8.5 bn while Bahrain's income will slip to nearly $ 1 bn from $ 1.4 bn.
"We forecast the price of OPEC's basket of crude to average around $ 24 this year compared with $ 27.60 last year," Dr. Drollas said. "This will push OPEC's total oil export income to around $ 176.6 bn from $ 209.7 bn."

The surge in oil earnings last year brought one of the best economic years for the GCC nations, with most of them recording surpluses in their budgets and current account for the first time in more than 15 years. In nominal terms, their economies jumped by nearly 22 % while there was real growth in all member states as higher revenues allowed them to spend more and tempted the private sector to expand investments. High oil prices also enabled regional governments to replenish their eroding cash reserves which leapt from around $ 18 bn two years ago to nearly $ 45 bn at the end of August.

Source: Gulf News
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