Arab Income Likely to Halve in 2009

Arab oil producers netted more than US$70 million per hour in crude export revenues in 2008, official figures showed. However, income could dive below half this amount in 2009 because of the sharp fall in oil prices.

The combined oil export earnings of the 11-nation Organisation of Arab Petroleum Exporting Countries (OAPEC), which controls more than 60% of the world's extractable crude resources, hit an all-time high of US$618 billion in current prices in 2008 after oil prices climbed to a record high. The increase meant the 11 producers earned nearly US$1.693 billion per day and around US$70.3 million per hour in 2008, their highest average income since they began pumping crude more than half a century ago.

OAPEC's estimates showed Saudi Arabia, the world's oil basin, was the top earner, with its crude export value swelling to its highest level of around US$267 billion, an average US$731 milliom a day and US$30.4 million per hour. The UAE was the second largest earner, with its income peaking at around US$80.6 billion, an average US$220 million a day and US$9.2 millio per hour. Kuwait recorded the third highest revenues of US$71.2 billion in 2008, which means it earned US$195 million per day and US$8.1 million per hour. Iraq, which controls the third largest proven oil reserves after Saudi Arabia and Iran, netted nearly US$63 billion through the year, an average US$172.6 million a day and around US$7.2 million an hour.

Other major earners included Libya, Algeria and Qatar, while there was no data for Tunisia, which is not an oil exporter. Oapec gave no forecast for 2009 but independent estimates put the combined Arab income this year at around US$300 billion, below half the 2008 level and less than the revenues netted in 2007, 2006 and 2005. Analysts said the plunge in this year's crude export earnings would be a result of lower oil production by most regional exporters, including Saudi Arabia, Kuwait and the UAE, and lower prices, which are expected to average US$50-US$60 a barrel. Oil prices soared to their highest average of around US$95 in 2008 after they hit an all-time high of US$147 in late July before crashing by more than US$100 in the few months that followed the eruption of the global fiscal turmoil in September. OAPEC figures showed the Arab oil income sharply fluctuated through 2008 because of the oil price change. From around US$145.7 billion in the first quarter, the income surged to nearly US$188.7 billion in the second quarter.

It peaked at US$191.2 billion in the third quarter when oil prices averaged US$113 a barrel. The revenues dived to US$83.3 billion in the last quarter after oil prices plummeted to just below US$40 a barrel in November and December. - Business 24/7