ABUJA, Nigeria (CU)_Crude oil export revenue of the members of the Organization of the Petroleum Exporting Countries (OPEC) for 2020 declined to $323 billion, in comparison to $595 billion recorded in 2019, a new report issued by the US Energy Information Administration (EIA) has revealed, noting that this would be the lowest revenue level recorded in 18 years.
Nigeria has been among the many oil producers that have announced a decline in oil receipts, with the West African nation looking to the Bretton Woods institutions for loans as a buffer.
Although oil exports account for less than 10 per cent of Nigeria’s gross domestic product (GDP), however, 90 per cent of the country’s foreign exchange, as well as half of government revenue are generated through the petroleum industry, which has been severely impacted, with net oil export earnings between January to September 2020 estimated to be at $16 billion, down from $37 billion recorded in 2019.
While Saudi Arabia took the biggest chunk of OPEC’s collective oil revenues for 2020, however, the Middle Eastern’s nation’s revenue last year was also hit by the significant drop in demand owing to the pandemic.
“The decrease in revenues could be detrimental to member countries’ fiscal budgets, which rely heavily on oil sales to import goods, fund social programmes, and support public services,” the EIA said.
And despite substantial deficits and a surge in loans to prop up budgets, the OPEC appears to be guardedly optimistic about the immediate future, as the Agency forecast the demand for oil in 2021 to rise by 5.9 million bpd, to reach 25.9 million bpd.
The group noted that although oil demand is not projected to “fully recover” from the 2020 slump, however, it is hopeful that the recovery in transportation fuels would lead to developments in the labour market and gasoline retail prices.
