Slumping prices hit OPEC's 2019 oil revenue as exports shrink on production cuts

London — OPEC's 13 members suffered an 18.4% contraction in their oil export revenue in 2019 on slumping prices, the organization's Annual Statistical Bulletin showed July 13, denting their economies leading into 2020's COVID-19 crisis and market meltdown.

The value of OPEC petroleum export revenue fell to $564.9 billion in 2019 from $692.3 billion in 2018, the report showed, as anemic demand growth and continued competition from non-OPEC producers impacted the group.

The figures demonstrate the financial pain OPEC was already facing even before the coronavirus pandemic wiped out nearly a fifth of global oil demand in the second quarter of 2020. And they highlight the urgency behind the producer group's efforts to prop up the market through production cuts, as the oil-dependent governments try to defend prices over market share.

OPEC cut its production by 1.86 million b/d, or 6%, in the year, while non-OPEC output grew by 1.3 million b/d, or 2.9%, the report showed.

The International Monetary Fund on July 13 said Middle East oil exporters, which form the core of OPEC, are in for extreme pain in 2020, revising downward its estimate of economic growth to -7.3%. It said its forecast reflects the "'double whammy' from oil price fluctuations (and supply cuts) and the pandemic-linked lockdowns."

OPEC is in the fourth year of coordinated production cuts with 10 allies, including Russia. The deal for 2019 called for 1.2 million b/d in combined cuts between the 23 countries, though core Gulf OPEC members Saudi Arabia, the UAE and Kuwait contributed voluntary additional cuts to help boost the market's recovery.

In May, the OPEC+ coalition implemented the steepest cuts in history, at 9.7 million b/d, as oil demand plummeted in the face of the coronavirus pandemic.

Those cuts are set to roll back to 7.6 million b/d in August, and OPEC officials have said they see a brighter outlook for oil demand in the months ahead. A key market monitoring committee, co-chaired by Saudi Arabia and Russia, will convene online Wednesday to assess market conditions.

Crashing exports

According to the bulletin, OPEC shipped 70% of its exports -- 15.73 million b/d -- to Asian markets, where demand has been robust.

OPEC crude exports to Europe fell to 4.01 million b/d in 2019, down 12% year on year. North America, where US and Canadian production has been surging, cut its imports of OPEC crude by more than half to 1.22 million b/d, down 53% from 2018.

OPEC oil product exports averaged 3.88 million b/d in 2019, according to the report, down 17% on year.

Imports of petroleum products by OPEC member countries averaged 1.68 million b/d in 2019, 31% lower than in 2018.