Updates
October 20, 2020: OPEC+ is on the brink of a disaster. Link to Cyril Widdershoven.
Original Post
OPEC in deep doo-doo. The "Switzerland of the Middle East" is struggling to balance its books. And that began well before the Chinese flu pandemic of 2020.
From OPEC press release:
Oman is one of the ten non-OPEC participating countries of the 'Declaration of Cooperation', and has a long and rich history of collaboration with OPEC, spanning nearly three decades. ... “The greatest highlights in Omani-OPEC relations have occurred in the last 20 years.
Article over at Financial Times, behind a paywall, of course.
From the article:
Sandwiched between Saudi Arabia and Iran, Oman has long prized its neutrality, garnering a reputation as the Middle East’s Switzerland.Archived.
But the Gulf state’s ability to steer clear of regional power struggles has been put at risk by economic woes that have been exacerbated by the coronavirus pandemic and the slump in oil prices. The IMF forecasts an economic contraction of 10 per cent this year, far steeper than the Middle Eastern average.
The crisis has been a baptism of fire for Sultan Haitham bin Tariq Al Said, who succeeded Qaboos bin Said Al Said in January after the death of the leader who shaped modern Oman during his half century on the throne.
The sultanate’s budget deficit is forecast to hit 20 per cent of gross domestic product this year after revenues tumbled. With modest hydrocarbon resources, Oman has around $16bn in foreign exchange reserves and another $16bn in readily available overseas assets, but the fiscal shortfall and maturing global bonds amount to more than $13bn a year for the next three years.
The sultanate, which borrowed $2bn from global banks in August, will need to draw down domestic deposits including from the sovereign wealth fund, asset sales and more loans in order to steady the budget. It is considering a return to bond markets to raise $2bn-$4bn.
Oman is not part of OPEC. It's an oil exporter and part of OPEC+ (like Russia and Mexico and even sometimes Norway). But definitely not part of OPEC proper.
ReplyDeleteThank you. I will note that in the post above.
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