OPEC Members’ Net Oil Export Earnings May Crash to $341 billion

• Nigeria’s crude business revenue drops by more than half to $39b in 2015

• Earns $10b between January and May

The United States (U.S.) Energy Information Administration (EIA) has projected that members of the Organisation of the Petroleum Exporting Countries (OPEC) net oil export revenues could fall from the $404 billion it earned in 2015 to about $341 billion in 2016.

The EIA, which made this disclosure in OPEC revenues fact sheet released yesterday, stated that the cartel’s revenue declined by 46 per cent from the $753 billion earned in 2014 to $404 billion, mainly as a result of a precipitous fall in average yearly crude oil prices during the year.

OPEC’s oil export income per person is back to where it was when prices crashed at the end of the 1990s.

According to the agency, these net export earnings include Iran, unlike in previous reports.

Specifically, Nigeria’s oil export revenue declined from the $78 billion it earned in 2014 to $39 billion in 2015.

Already, the country has earned only $10 billion between January and May this year.

Also, Nigeria’s per capita net oil export revenue dropped from $492 billion it recorded in 2014 to $240 as at December 2015.

For 2017, OPEC revenues are projected to be $427 billion, with an increase in forecast crude oil prices, coupled with higher production and exports, contributing to the rise in overall earnings.

However, the report noted that Iran’s net export revenues are not adjusted for possible price discounts the country may have offered its customers between late 2011 and January 2016, when nuclear-related sanctions targeting Iran’s oil sales were in place.

Saudi Arabia earned the largest share of these earnings, $130 billion in 2015, representing approximately one-third of total OPEC oil revenues.

On a per capita basis, OPEC net oil export earnings are expected to decline by about 17 per cent from $606 in 2015 to $503 in 2016.

The expected decline in OPEC’s net export earnings has been attributed to lower forecast yearly crude oil prices in 2016 compared with 2015.

The price declines are expected to more than offset OPEC’s increased production and exports in 2016.

EIA’s June report projects that OPEC crude oil production will average 32.4 million barrels per day (bpd) in 2016, 0.8 million bpd higher than in 2015.

EIA estimates that petroleum and other liquid fuels production in countries outside of the Organization of the Petroleum Exporting Countries (OPEC) grew by 1.5 million bpd in 2015, with more than half of the growth occurring in North America.

EIA expects non-OPEC production to decline by 0.6 million b/d in 2016 and by 0.2 million bpd in 2017.

The agency said that changes in non-OPEC production were largely driven by changes in U.S. tight oil production, which has high production decline rates and relatively short investment horizons, making it among the most price-sensitive oil production globally.