Regístrese hoy mismo

y en menos de un minuto podrá acceder a:Titulares de última horaAnálisis y reportajesVídeos, podcasts y blogs sobre materias primasMuestras de precios e información de mercadoInformes especialesAvisos a los suscriptores y alertas diarias por correo electrónico

¿Ya tiene una cuenta?

Inicie sesión para registrarse

¿Olvidó su contraseña?

En esta lista
Petróleo

Gulf region to suffer worst recession in 2020 due to oil crash, coronavirus: IIF

Gas natural | Petróleo

Platts Scenario Planning Service

Petróleo | Crudo

La CHN permite a Pemex incrementar el gasto en campo Jiliapa

Petróleo | Crudo

La CHN permite a Pemex incrementar el gasto en campo Jiliapa

Gulf region to suffer worst recession in 2020 due to oil crash, coronavirus: IIF

Lo más destacado

Economy of six-member GCC to contract 4.4% in 2020

Oman's economy to shrink the most

Oil GDP will contract 5.3% due to OPEC+ cuts

Dubai — The six-member Gulf Cooperation Council will suffer from the worst recession ever in 2020 due to the oil price crash and the coronavirus pandemic, the Institute of International Finance said in a report June 2.

¿No está registrado?

Reciba alertas diarias y avisos para suscriptores por correo electrónico; personalice su experiencia.

Registro

The economy of the energy-exporting GCC region will shrink 4.4% in 2020, with Oman having the worst contraction of 5.3% among the six countries. GCC countries are Saudi Araba, Kuwait, UAE, Oman, Qatar and Bahrain.

"Shocked by COVID-19 and the plunge in oil prices, the six GCC states will experience their worst recession in history," said the IIF in the report.

"The depth of the contraction for this year and the speed of the expected recovery in 2021 is subject to a high degree of uncertainty."

The IIF is more bearish than the International Monetary Fund, which forecast in April the GCC region's economy would shrink 2.7% in 2020, compared with October's forecast of a 2.5% growth.

Oil GDP

The GCC's oil economy will contract the most, by 5.3% in 2020 due to the OPEC+ cuts, the IIF said

"Growth could resume in 2021, supported by the partial easing in oil production cuts and gradual pick-up in private sector non-oil activity," the IIF said.

OPEC+ is currently in the midst of a historic 9.7 million b/d production cut that started in May to help soak up excess supply in the market as coronavirus crippled demand.

The 9.7 million cut, which is for May and June, will be followed by gradual easing of curbs through to April 2022.

OPEC+ members are due to meet this week virtually to discuss whether to extend the 9.7 million b/d cut beyond June.

Saudi Arabia, Kuwait and the UAE are OPEC members, while Oman is a member of the non-OPEC states in 23-member coalition of OPEC+.

Breakeven prices

IIF is estimating that Gulf countries will need lower fiscal breakeven oil prices to balance their budgets because of spending cuts.

The fiscal breakeven Brent oil price for Saudi Arabia is $75/b, Bahrain ($77/b), Oman ($80/b), and Qatar ($54/b) in 2020.

"The significant cut in public spending in the six GCC states could more than offset losses stemming from reduced oil exports," the Washington-based institute said.

Despite the region's spending cuts, the GCC's fiscal deficit is forecast to widen to 10.3% of GDP in 2020 from 2.5% in 2019, assuming an average Brent oil price of $40/b.

Lost oil revenue

"Brent oil prices are expected to remain in a range of $40-$50 a barrel over the medium term, well below the fiscal breakeven oil prices for the six GCC states," the IIF said. "Under such prolonged oil prices, the deficits could remain large despite continued fiscal adjustment."

GCC oil revenue is projected to plunge to $200 billion in 2020 from $326 billion in 2019, the institute said.

"Saudi Arabia, Kuwait, Qatar, and the UAE, with large public foreign assets, are better placed to accommodate large deficits than Bahrain and Oman," the IIF said. "While Bahrain can count on financial aid from its neighbors as a cushion against external pressure, Oman is emerging as an increasingly vulnerable spot in the region in light of its mounting debt."