The earnings of the Organization of the Petroleum Exporting Countries (OPEC) members will decline to the lowest level since 2002 with about $323 billion in net oil export revenues for 2020, the US Energy Information Administration (EIA) said in a report on Thursday.
The expected decrease in export revenues compared with last year is driven by lower crude oil prices and lower export volumes, the agency said.
Crude oil prices have fallen as a result of lower global demand for petroleum products because of COVID-19 and associated mitigation efforts. Export volumes have also decreased as a result of high production disruptions in Libya, Iran, and Venezuela and OPEC agreements to limit crude oil output in response to low crude oil prices.
OPEC earned an estimated $595 billion in net oil export revenues in 2019, a decrease of 17% compared with the estimated 2018 net export revenue and less than half the estimated record high of almost $1.2 trillion earned in 2012, the agency said.
Similar to the factors driving the decrease in net oil revenues in 2020, the estimated 2019 revenues fell as a result of lower crude oil prices, higher crude oil production disruptions, and voluntary curtailment of crude oil output among OPEC members.
The EIA forecast that 2020 per capita net oil export revenues will fall to $638 from $1,201 in 2019, down 19% from 2018.
The Brent spot price fell from an annual average of $71 per barrel in 2018 to $64 in 2019, and the EIA expects it to average $41 per barrel in 2020.
Heavier crude oils are typically priced lower than lighter crude oils. As the global slate of crude oil changed with increased light crude oil production, some OPEC members benefited from a narrowing price discount for their heavier crude oils.
-Iranian, Venezuela oil sales affect OPEC revenues in 2019, 2020
Sanctions targeting Iranian and Venezuela crude oil sales as well as a combination of mismanagement and general deterioration of the oil sector in Venezuela affected total OPEC revenues in 2019 and 2020, the agency reported.
“Combined crude oil production in Iran and Venezuela fell by 1.9 million barrels per day (bpd), or 37%, in 2019 and then by more than 600,000 bpd between January and September 2020,” the agency said adding that both countries’ net oil export revenues halved from 2018 to 2019.
According to the EIA, Venezuela’s net oil revenues continued to fall in the first half of 2020 as a result of falling oil prices and US sanctions that affected country’s ability to sell its oil.
The agency estimated that from January to July 2020, Venezuela received an estimated $3 billion in net export revenues, down from an estimated $8 billion during the same period in 2019.
Likewise, Iranian oil exports were also limited by sanctions and COVID-19 and its mitigation efforts.
“Export revenues fell to a low of $50 million in April 2020,” the agency said estimating that country’s export revenues from January to July 2020 stood at a total of $9 billion in, compared with $20 billion during the same period in 2019.
By Sibel Morrow