Oil price fall costs Arabs $245bn
A sharp decline in oil prices allied with lower production depressed the combined Arab oil export earnings by nearly $245 billion in 2009 but the income remains far higher than in early 2000s, according to official data.
From a record high of around $623 billion in 2008, the total Arab oil export revenue dipped to nearly $378 billion in 2009, its lowest level since 2005, showed the figures by the Kuwaiti-based Organization of Arab Petroleum Exporting Countries (OAPEC), which groups 10 regional oil producers.
“The decline was due to a sharp fall in oil prices after the 2008 global crisis and lower output by most Arab producers,” OAPEC said.
Oil prices climbed to an all time high average of around $95 in 2008 although they plunged by nearly $100 in the fourth quarter because of the crisis.
Prices averaged as low as $35 in the first quarter of 2009, prompting the 12-nation Organization of Petroleum Exporting Countries (OPEC) to agree on cutting supplies by a total 4.2 million barrels per day.
Although the cartel’s compliance with the agreed cuts has not been complete, crude prices have sharply rebounded over the past months, buoyed by lower supply and a gradual recovery in the global economy.
Despite their steep decline last year, the Arab oil export earnings remain much higher than their level in the early years of the latest oil boom.
OAPEC put the income at around $188 billion in 2000, when oil prices averaged about $27.6. The income dipped to nearly $141 billion in 2002 due to lower prices before rebounding to $224 billion in 2004. Revenues sharply grew to nearly $407 billion in 2006 after oil prices shot up to an average $61.
OAPEC gave no figures for 2010 but analysts believe the earnings rebounded during that year because of higher oil prices, which averaged well above $70 a barrel compared with nearly $62 in 2009.
OAPEC’s report showed the Arab world’s real income stood at only around $298 billion in 2005 prices compared with nearly $498 billion in 2008.
It said the real earnings were much lower because of inflation and lower dollar rate.
A breakdown showed Saudi Arabia, the world’s largest oil exporter, was the main victim of the decline in crude prices, with its income tumbling to nearly $144 billion in 2009 from a peak of $247 billion in 2008.
The UAE, the second largest producer and earner in the region, saw its income plummet to nearly $44.7 billion from $80.6 billion as a result of lower prices and cut of over 200,000 barrels per day in its output.
Kuwait’s revenues slumped to $41.8 billion from $57.6 billion while those of Qatar dipped to $16.1 billion from $27.4 billion. Bahrain, which has little oil, recorded a drop to around $3.2 billion from $5.8 billion.
The oil earnings of conflict-battered Iraq dived to $43.8 billion from about $63 billion, according to OAPEC, which controls over 60 per cent of the world’s oil.
Outside the Gulf, Algeria’s income plunged to around $21.4 billion from $38.5 billion while that of Libya crumbled to nearly $29.4 billion from $52 billion.
The income of Oman, which is not a member of OAPEC and OPEC, shrank to about $17 billion from $23.2 billion and that of Egypt to $2.1 billion from $4.9 billion. Yemen’s revenues also receded to $1.8 billion from $3.7 billion.
“After gradually rising in previous years, oil production by the Arab countries in 2009 declined to its 2000 level….it accounted for around 30.6 per cent of the total global crude supplies last year,” OAPEC said.
In a previous study, OAPEC said its members earned a total $3.1 trillion during 1997-2009 from a production of around 71.5 billion barrels. More than a fifth of the total earnings were achieved in 2008.
The report showed OAPEC’s collective income grew by nearly 17 per cent annually during that period, with the highest growth achieved by Iraq following a surge in its output after the end of the war.
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