(Corrects figure to more than $500 million in paragraph 4)
* Interactive Chart: https://tmsnrt.rs/2TOo7nb
By Ahmad Ghaddar
LONDON, March 9 (Reuters) - With oil erasing over a third of
its value overnight after a messy breakup of the OPEC+ alliance,
OPEC members are bleeding over half a billion dollars a day in
lost revenue, according to Reuters calculations.
For the most part, oil is a top income source for members of
the Organization of the Petroleum Exporting Countries and such a
dramatic fall in prices will put strain on their economies, some
of which such as Iran and Venezuela, are already on the brink.
Brent LCOc1 crude futures were down by as much as 31% to
$31.02 on Monday, their lowest since mid-February 2016. At that
low, prices were down nearly $20 a barrel from a high before the
meeting of OPEC and its allies on March 6.
This means that in total, and based on their average
February production, OPEC members lost more than $500 million in
revenue, according to Reuters calculations.
The losses are a lot more pronounced when compared with the
high of $71.75 a barrel that Brent hit in January.
OPEC had been pushing for expanding the existing cuts with
its allies, known as OPEC+, by an additional 1.5 million barrels
per day to over 3 million bpd until the end of the year. Russia
turned the proposal down, causing the collapse of the alliance
and the start of a price war over market share.
For some nations, including one the group's richest members
Saudi Arabia, fiscal budget break-even oil prices were already
much higher than the oil price before the most recent collapse.
"A $10 a barrel decline in oil prices lowers fiscal revenues
by 2-4% of GDP, depending on the country, and fiscal break-even
prices are well above current levels for all Gulf Cooperation
Council sovereigns," Jan Friedrich, Head of Middle East and
Africa Sovereign Ratings here at Fitch Ratings said.
"However, at least the higher-rated sovereigns, particularly
Kuwait, Qatar and Abu Dhabi, have ample buffers, mainly in the
form of sovereign wealth funds," he added.
Interactive Chart: https://tmsnrt.rs/2TOo7nb
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Oil price dive turns up the heat on OPEC finances png https://tmsnrt.rs/2IulvWo
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