High oil prices boost Opec income to $423bn

A surge in crude prices boosted Opec's income to a record $423 billion (Dh1.5 trillion) in the first five months of 2008 and the earnings are projected to far exceed $1trn through the year, official US estimates showed yesterday.

The UAE and other Gulf oil heavyweights are expected to net nearly half that income as they pump almost 50 per cent of the crude supplies of the 13-nation Organisation of Petroleum Exporting Countries, the report said.

From $673bn in 2007, the group's oil export revenues are forecast to leap to $1.17trn this year and swell further to $1.21trn in 2009, showed the report by the Energy Information Administration (EIA) of the US Energy Department.

EIA's latest projections are far higher than its forecasts early this year, when it estimated Opec's oil earnings at around $1.06trn in 2008.

The report gave no breakdown for earnings by the 13 producers but oil analysts believe the four GCC members – the UAE, Saudi Arabia, Kuwait and Qatar – are expected to net nearly half the 2008 income as they produce half the Organisation's total crude output, which averaged at nearly 32 million barrels per day during the first quarter of this year.

"Based on EIA's forecasts, those four GCC states could earn as much as $600bn this year, their highest ever," a London-based analyst said.

The four GCC countries earned around $338bn in 2007, almost half Opec's revenues of around $673bn. Their crude production was estimated at around 15 million bpd, nearly 50 per cent of Opec's total output.

Experts said EIA's revised projections showed that the US expects Opec's crude production to remain at around 32 million bpd this year and average oil prices to be as high as $100 a barrel in 2008 and 2009. Opec's 2007 income was the highest the group has netted since it was created nearly half a century ago and was about 10 per cent higher than the 2006 income. It was also more than six times the revenues of around $103bn achieved in 1998, when oil prices collapsed to $10 a barrel.

With the inclusion of the other two GCC members, Oman and Bahrain, the GCC's combined oil export earnings could have peaked at $364bn in 2007. They could also exceed $600bn in 2008, almost 10 times their 1998 level. According to EIA, Qatar had the highest per capita net oil export revenues in 2007, at $28,357.

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