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Bloomberg worked out which oil price do producing countries need

The largest oil-producing countries need different oil price for balancing their budgets. This is where disagreement about oil production comes from.

29.Nov.16 12:01 AM
By Anna Tuzova


Bloomberg worked out which oil price do producing countries need

Bloomberg, with reference to the International Monetary Fund (IMF) data and investment banks’ calculations has evaluated which price do oil producing countries need to balance their budgets.

For Kuwait, in particular, to deal with a budget deficit in 2016, the enough average oil price would be $47,8pb (per barrel). It’s lower, than Brent cost on Monday on the ICE exchange ($48,05). Kuwait’s government are traditionally advocate for oil output cut, supporting their allies from Saudi Arabia.

United Arab Emirates for balancing its budget need the oil price to increase to $58,6pb, Qatar – to $62,1pb, Saudi Arabia -  to $79,7pb, as Bloomberg writes with a link to an IMF data. In 2015 Saudi Arabia’s budget deficit in a background of low oil prices has reached the maximum since 1991, amounting to 97 million dollars, which is 15 percent of the GDP.

The needed price for Iran to balance their budget is $55, 3pb. Iran, however, is more interested in return of its oil market share, which has reduced during sanctions imposed by the USA and EU, so the country aims at allowing it to increase the extraction of oil.

As Bloomberg worked out, Russia needs the oil price raise to $69bp to reach the budget without a deficit. As in September the president of Russia Vladimir Putin said, that the existing price suites the country, though it “could be higher”.

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