Philosophy over coffee

Oil Break-Evens

In Interesting, Size: Grande on November 6, 2008 at 12:10 am

Going back to more than 3 months ago, in July, the price of oil peaked at $147 per barrel. While some analysts predicted oil going up even as high as $200 per barrel, many others saw this as nothing but a bubble that soon will burst and undergo price correction. The past couple of weeks, oil has been hovering under $70 a barrel bringing down majority of the prices in gas pumps to less than $3 a gallon. Today, the oil settled at $65.25 pb; it dipped to as low as under 64 just several days ago.

The big spike in oil price months back certainly boosted revenues of major oil producing countries, whose windfall profits helped fatten some of the existing sovereign wealth funds. It is therefore no surprise that Abu Dhabi, Kuwait, Qatar and Libya find themselves on the list of the biggest funds. Despite that, it would still be good and interesting to know that not all these states earn, let alone big amounts. Even at $80 or $90, some of these states might still be losing money.

Based on a CNBC report, along with IMF data, following is a table of both OPEC and non-OPEC countries alike and the corresponding oil prices they need to avoid budget deficits (break-even):

Country

2008

2009

Bahrain

$75

$84

Kuwait

33

34

Oman

77

78

Qatar

24

24

Saudi Arabia

49

54

UAE

23

24

Algeria

50

60

Azerbaijan

40

35

Iran

90

90

Iraq

111

94

Kazakhstan

59

67

Libya

47

53

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