Diesel Refilling fuel view from inside of gas tank of a car
BreakingFeaturedHighlightOil & GasTrending Story

Nigeria, Angola, other Oil exporting countries set to see large surpluses in 2022 as crude prices increase

473

 

Oil exporting countries across the globe will have large surpluses in 2021 and 2022 as higher crude prices lead to more revenues for many producers, according to the Institute of International Finance.

“Net hydrocarbon exports and hydrocarbon government revenues account for more than half of total exports and total government revenues, respectively in major oil exporters,” the institute said in a report obtained by Persecondnews.com Thursday.

The Fitch Ratings also said that the higher oil prices, reform momentum, a gradual return of global trade and tourism are “brightening the economic prospects for much of the region, supported by Covid-19 vaccination and easing restrictions”.

“The GCC will experience significant narrowing of fiscal deficits in 2021,” the ratings agency said. Fitch’s forecasts assume average Brent crude oil prices of $63 a barrel in 2021, accompanied by further unwinding of Opec+ production cuts.

As a result of the surge in oil windfall due to the crude price surge, the breakeven price of oil for exporting countries will continue to decline, falling below $70 per barrel for the UAE, Saudi Arabia, Qatar, Oman and Angola, according to the IIF.

Fitch estimates a fiscal break-even oil price range between $55 a barrel to $90 a barrel, depending on the country.

The IIF predicted that the boom might be limited in oil exporting countries like Nigeria, Kazakhstan and Algeria.

“Consequently, the fiscal deficits of 2020 will shift to large surpluses in 2021 and 2022 in most oil exporters, except in Nigeria, Kazakhstan and Algeria.”

However, in Nigeria, Africa’s largest producer, declining crude output will partially offset any gains from higher oil prices because of diminishing volume, the IIF said.

“Our calculations show that Russia’s fiscal breakeven oil price in 2022, $44 per barrel, will be the lowest among oil exporters, supported by the expected recovery in oil and natural gas exports in volume terms,” IIF said in its report.

Oil prices have surged to multi-year highs this year, supported by a broader recovery in the global economy, which has led to a greater demand for crude.

READ ALSO : NNPC says its committed to growing nations hydrocarbon reserves to 40bn barrels

Prices are also up because of underinvestment in the sector, leading to a tighter supply for crude as well as rising demand and a faster than expected recovery from the Covid-19 pandemic in developed markets.

 

While oil exporting countries will recover some of the ground lost to the decimation of the sector due to low energy prices last year, oil importing countries will be hurt the most due to the continuing rally in commodities.

However, Opec+, the bloc of oil exporters, which is on course to bring 2 million barrels per day back to the market by the end of the year, has so far resisted pressures to significantly increase output.

“The sharp increase in oil and natural gas prices has begun to weigh on external balances, raising vulnerabilities for these countries,” the IIF said.

“Wider current account deficits in these countries could lead to difficulty in meeting external financing.”

Leave a comment

Related Articles

Demolition of Abuja N200bln properties: Restrain Wike, Estate Developers Beg Pres. Tinubu

President Bola Tinubu has been urged to intervene in the alleged demolition...

ECOWAS, Nigeria, Morocco, Mauritania Commit to $26bln African Atlantic Gas Pipeline Project

“The project, conceived in 2016 during King Mohammed VI of Morocco’s visit...

FirstBank’s retired CEO, Adeduntan, gets presidential commendation

Impressed with his exemplary career trajectory and transformative leadership, President Bola Tinubu...

#EndBadGovernance protests: AGF to Police: Transfer casefiles of 72 defendants to my office

The Attorney General of the Federation (AGF) and Minister of Justice, Prince...

NAGAFF Taps NPA MD, Dr. Abubakar Dantsoho, as Keynote Speaker for Silver Jubilee Anniversary

The National Association of Government Approved Freight Forwarders (NAGAFF) has announced Dr....

It’s fake news: Fubara did not order shut down of NNPC Ltd, oil companies in Rivers

The Rivers State Government has refuted a report circulating on social media,...

Tinubu to NEC: Allow tax reform bills pass through legislative process, public hearing

President Bola Tinubu has received the National Economic Council’s recommendation that the...

Minister Inspects Bagaja Renewables’ Zawaciki 1MWp Mini-Grid Amid Northern Power Crisis

As northern Nigeria grapples with prolonged power outages, Minister of Power Adelabu...

Just in: Court grants VeryDarkMan N2m bail

Reprieve has come for the detained social media critic, Martins Otse, popularly...

Just in: #EndBadGovernance protest: Teenager collapses in court, forces judge to suspend proceeding

A teenager, one of the 76 people charged before a Federal High...

Keyamo refutes reports of airstrip license revocation for Oyedepo, others

The Minister of Aviation and Aerospace Development, Mr. Festus Keyamo (SAN), has...

Just in: 76 #EndBadGovernance protesters arraigned in Abuja

The detained 76 #EndBadGovernance protesters just arrived at the Federal High Court...

Tax reform bill not targeted at North, to streamline tax administration processes, enhance efficiency – Presidency

The Presidency has clarified the misconceptions about the tax reform of the...

DSS, Police to give security clearance to Abuja drivers from 2025 – Wike, FCT Minister

In a bold move to curtail kidnapping and the ubiquitous ‘one chance’...

Reps step down motion to reverse change of Niger Delta Ministry to Regional Development Ministry

The House of Representatives has failed to consider a motion asking President...

FG holds talks with striking university workers

Four days into the seven-day warning strike, the Federal Government has invited...

Golden Jubilee: Soneye Strikes decisive goal as FS 50 edges Okocha’s FS Legends 2-1

In a thrilling match commemorating Mr. Olufemi Soneye’s 50th birthday, Team FS...

Philanthropist Dr. Kensington Adebutu’s multi-million Naira Media Resource Centre at NIJ, Lagos, Inaugurated

The prestigious Sir (Dr.) Kensington Adebukunola Adebutu Media Resource Centre built by...

Just in: After 10 months in captivity, Kaduna female doctor, Popoola, freed

Ten months after her kidnapping, Kaduna-based medical doctor, Dr. Ganiyat Popoola, has...

Just in: Reps to FG: Halt issuance of licence to private airstrips

Citing security reasons, the House of Representatives has moved to stop the...