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29 March 2024

High oil prices boost OPEC's income to highest in 51 years

Published
By Nadim Kawach

A surge in oil prices and output will likely lift OPEC’s crude export earnings this year to their highest level since the cartel was created 51 years ago, according to projections by a key western energy studies centre.

At $899 billion in 2011, the combined revenue of the 12-nation Organization of Petroleum Exporting Countries will be $249 billion above the 2010 income of around $650 billion and about $381 billion over the 2009 earnings of $518 billion.

The forecasts by the London-based Centre for Global Energy Studies (CGES), which is chaired by former Saudi oil minister Sheikh Ahmed Zaki Al Yamani, showed the assumed earnings are based on an average price of OPEC’s basket of a record high of $106.8 a barrel and combined output by the cartel of about 29.83 million barrels per day in 2011 compared with 29.3 million bpd in 2010.

OPEC previously achieved an all time high income of around $902 billion in 2008 when crude prices averaged nearly $95 but the revenue also included Indonesia, which later pulled out of the Organization.

“The 2008 figure including Indonesia was $902 billion… if we exclude Indonesia from the 2008 figure in order to make it fully compatible with the 2011 number, the aggregate number for 2008 is $894 billion, which makes the 2011 total ($899 billion the highest ever,” CGES director Leo Drollas told Emirates 24/7.

His figures showed Saudi Arabia, the world’s dominant oil exporter, would net a record high of around d $288 billion, nearly a third of OPEC’s collective revenue.

In its annual report released recently, OPEC said its total oil export earnings surged to around $650 billion in 2010 from $518 billion in 2009 mainly because of an increase of nearly $15 in oil prices.

CGES gave no figures for other Gulf OPEC members but according to the government-controlled Emirates Industrial Bank (EIB), the six Gulf Cooperation Council (GCC) members could net as high as $608 billion this year, nearly 30 per cent above their 2010 income of about $465 billion.

“This large increase in crude prices together with a rise in production to nearly 16.5 million barrels per day, will likely push up the GCC’s crude export earnings to their highest ever level in 2011,” EIB said.

EIB noted that Saudi Arabia, sitting atop a fifth of the world’s oil wealth, has boosted oil supplies to one of its highest levels of around 9.8 million bpd over the past few months to make up for crude disruption in conflict-hit Libya.

It gave no figures for supplies in other GCC members but industry sources estimated the group’s total production in 2010 at 15.2 million bpd.

OPEC figures high prices boosted the UAE’s income in 2010 by nearly 30 per cent to around $74 billion from nearly $57 billion in 2009.

It gave no estimates for 2011 but the UAE could net its highest income of more than $90 billion to beat its previous record of around $84 billion in 2008.

The surge in revenue allowed most OPEC members to have massive current account surpluses and this was expected to have boosted their foreign assets.

The OPEC report showed the UAE’s current account surplus largely widened to around $23.2 billion in 2010 from $8.2 billion while the surplus surged to $38.7 billion from $22.7 billion in Saudi Arabia, to $43.1 billion from $28.6 billion in Kuwait and to around $21 billion from $6.68 billion in Qatar.

OPEC as a whole saw the current account surplus in its 12 members leap to $205 billion last year from $114 billion in 2009.