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Oil in Global Economy Series: Fiscal oil price break-even of many OPEC countries still far off

Since the oil price crash of 2014, several OPEC economies have taken prudent and sometimes draconian measures to cut their budget deficit and reduced fiscal breakeven oil price. The price of oil has increased over the past two years riding on OPEC production deal optimism and as the market has rebalanced. This week, the price of Brent, which is widely considered as the global oil price benchmark traded as high as $64.5 per barrel, which is the highest price since June 2015.

However, despite all the measures taken, the fiscal breakeven oil price for the majority of the OPEC economies remain still far off from the current price. Here is the list of OPEC economies with estimated fiscal breakeven oil price (calculations are done by IMF),

  • Yemen: For 2017, the fiscal breakeven oil price is estimated at $125 per barrel, down from $160 per barrel in 2014.
  • Libya: For 2017, the fiscal breakeven oil price is estimated at $102 per barrel, down from $206 per barrel in 2014.
  • Bahrain: For 2017, the fiscal breakeven oil price is estimated at $99 per barrel, down from $103.3 per barrel in 2014.
  • Oman: For 2017, the fiscal breakeven oil price is estimated at $83.6 per barrel, down from $94 per barrel in 2014.
  • Saudi Arabia: For 2017, the fiscal breakeven oil price is estimated at $73.1 per barrel, down from $105.7 per barrel in 2014.
  • United Arab Emirates: For 2017, the fiscal breakeven oil price is estimated at $68 per barrel, down from $91 per barrel in 2014.
  • Algeria: For 2017, the fiscal breakeven oil price is estimated at $63.8 per barrel, down from $135.3 per barrel in 2014.
  • Iran: For 2017, the fiscal breakeven oil price is estimated at $54.7 per barrel, down from $100 per barrel in 2014.
  • Iraq: For 2017, the fiscal breakeven oil price is estimated at $54.1 per barrel, down from $101.4 per barrel in 2014.
  • Qatar: For 2017, the fiscal breakeven oil price is estimated at $46.8 per barrel, down from $56.1 per barrel in 2014.
  • Kuwait: For 2017, the fiscal breakeven oil price is estimated at $46.5 per barrel, down from $54.5 per barrel in 2014.

Note that for Yemen and Libya, the fiscal breakevens are over-elevated due to continued war in the region.

Also, note that the current oil price ($63.3 per barrel) is higher than the fiscal break evens of only four OPEC countries.

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