Opec is expected to net its highest income yet of nearly $536 billion this year as oil prices head close to an average $70 a barrel and the cartel is pumping at near capacity, according to independent estimates.
The income is projected to swell by nearly $75bn next year as oil prices could rise further and Opec might come under further pressure to raise output to prevent crude prices from crashing through the $100 psychological barrier.
Saudi Arabia, the world’s oil powerhouse, netted nearly a third of Opec’s income in 2007, while the UAE emerged as the second largest earner although its crude production was far lower than Iran’s output.
From a record $506bn in 2006, Opec’s oil export earnings are forecast to surge to nearly $536bn this year and gain a staggering $75bn to hit an all-time high of nearly $611bn in 2008, according to estimates by the London-based Centre for Global Energy Studies (CGES).
“This year, Opec is expected to achieve its highest oil export revenues in nominal terms because crude prices are heading for their highest average and production is still high,” said Leo Drollas, deputy director of CGES, which is owned by former Saudi oil minister, Sheikh Ahmed Zaki Al Yamani.
“The revenues could climb further next year as we expect oil prices to exceed $70 a barrel,” Drollas told Emirates Business.
He said the CGES based its projections on Opec’s income on a basket price of $66.9 and production of around 29 million barrels per day in 2007. In 2008, prices were forecast at $74.4 and production at 29.6 million bpd. But according to Opec, the average prices this year could be higher as it is forecast at around $68 a barrel compared to $61.08 in 2006 and $50.64 in 2005.
CGES’s figures for Opec revenues did not include Angola, which joined the Group early this year. But it projected the African country’s revenues at around $41bn in 2007 and $51bn in 2008. Ecuador was not included in the forecasts as it rejoined Opec in early December after a 15-year absence.
A breakdown showed Saudi Arabia’s income is expected to climb from $165bn in 2006 to $170bn in 2007 and a record $190bn in 2008.
The UAE’s revenues were projected to grow from $53bn to $57bn and $66bn in the same period. Iran, which produces more than the UAE but exports less, is predicted to earn around $54bn this year and nearly $61bn in 2008. Kuwait is expected to net $53bn this year and $59bn next year.
CGES also expected large increases in the income of the other members, except Indonesia, whose oil exports are gradually eroding.