Crude oil production Photograph:( Reuters )
A barrel of oil costs around 60 dollars. In April last year, it was 20 dollars. It is a three-fold jump. But it's not enough for oil exporters. They are still losing money
Oil producers are getting benefitted but it's not enough as they are reporting staggering losses. The pandemic has triggered a crisis, a battle for survival in the oil sector.
A barrel of oil costs around 60 dollars. In April last year, it was 20 dollars. It is a three-fold jump. But it's not enough for oil exporters. They are still losing money.
Saudi Arabia needs to balance its budget next year and it would like oil to sell at 68 dollars a barrel.
For Iraq, the ideal price should be 80 dollars per barrel. Will oil touch these levels? The answer depends on which projections you believe.
Golman Sachs says oil prices will see a 20 per cent jump this year. The World Bank, on the other hand, is not so optimistic.
It says oil prices are will remain below 50 dollars per barrel through 2022. It will put a big hole in the budgets of oil exporting countries.
The regional alliance of Arab states is already predicting a budget deficit. Last year, the deficit was a little more than nine per cent.
In 2021, it will be close to six per cent. The losses could grow in the future. Between 2020 and 2023, the deficit of GCC countries is set to touch $ 490 billion dollars.
The lack of alternatives to cover up losses, forced this bloc to borrow more in 2020. An estimate from last year suggests GCC government debt is set to surge by $ 100 billion dollars.
Major oil countries are still reeling from the pandemic shock. And they are losing money on every barrel they sell. The world's biggest oil producing companies too are losing billions.
This month, they have reported record annual losses.
US's biggest oil producer, Exxon Mobil, has suffered a loss of more than 20 billion dollars. The first annual loss in the company's history. Conoco Phillips lost 2.7 billion dollars. In the United Kingdom, energy group BP reported 5.7 billion in losses.
It is a sign. The world wants to wean itself away from oil. It will mean trillions of dollars of losses in the next 20 years for oil producers.
Around 40 countries, which rely on oil for most of their income, could see their revenues fall by 46 per cent on average.
A total of $9 trillion over the next 20 years due to international initiatives to meet the Paris Agreement’s emission targets. It means a total loss of nine trillion dollars.