The low oil prices and the record OPEC+ production cuts are set to nearly halve the net oil export revenues of OPEC members this year compared to 2019, sending them plunging to their lowest level since 2002, the U.S. Energy Information Administration (EIA) said on Tuesday.

Collectively, OPEC members are estimated to earn about US$323 billion in net oil export revenues this year. If EIA’s forecast holds, the revenues will have dropped to their lowest level in 18 years. To compare, OPEC earned an estimated US$595 billion in net oil export revenues last year.  

This year, the pandemic and the oil price crash are hitting OPEC’s oil revenues, while the cartel is also cutting record volumes of production to support oil prices and help the market to rebalance.

Last year, the benchmark Brent Crude oil averaged $64 a barrel. This price is more than $20 a barrel lower than the average Brent price EIA expects this year—$41 per barrel. Production from OPEC is also down due to the cuts. The EIA expects the cartel’s oil output to average 30.7 million bpd in 2020, down by 3.9 million bpd compared to the average oil production of 34.5 million bpd in 2019.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programs, and support public services,” the EIA said.

The pandemic has significantly slowed down the economies of all major oil producers, while the oil price crash—which OPEC’s top producer and de facto leader Saudi Arabia helped to create when it flooded the market with oil in April—has markedly decreased oil revenues for the oil-dependent economies in the Middle East and Africa.

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In July, the International Monetary Fund (IMF) said that oil exporters in the Middle East and North Africa (MENA) were set to see their combined oil revenues drop by US$270 billion this year compared to 2019.

By Tsvetana Paraskova for Oilprice.com

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