Fitch Ratings reveals Gulf state is in best position of oil exporting nations to have balanced gov't budget
Kuwait’s in the best position of major oil exporting nations in the Middle East, Africa and parts of Europe to have a balanced government budget this year with oil forecast to average $52.50 a barrel, according to Fitch Ratings.
Nigeria is worst off, needing an oil price of $139 a barrel to balance its budget, Fitch said in a April 5 report on 14 major oil exporting nations in the Middle East, Africa and emerging Europe. Even after cuts in government subsidies and currency devaluations, 11 of them won’t have balanced government budgets this year, including Saudi Arabia, it said.
“Fiscal reforms and exchange rate adjustments are generally supporting improved fiscal positions compared to 2015, but have not prevented erosion of sovereign creditworthiness,” Fitch said.
Only Kuwait, Qatar and the Republic of Congo have estimated break-evens that are below Fitch’s oil price forecast for this year. Kuwait at $45 a barrel traditionally has a low break-even because of its high per-capita hydrocarbon production and more recently its “large estimated investment income” from its sovereign wealth fund, Fitch said.
Brent crude, a global benchmark, has averaged about $55 a barrel this year.
The rating agency said it “substantially” raised the fiscal break-even prices for Nigeria, Angola and Gabon from 2015 levels because of rising government spending.
Fitch’s forecast 2017 break-even oil prices, per barrel: Nigeria at $139 Bahrain at $84 Angola at $82 Oman at $75 Saudi Arabia at $74 Russia at $72 Kazakhstan at $71 Gabon at $66 Azerbaijan at $66 Iraq at $61 Abu Dhabi, United Arab Emirates, at $60 Republic of Congo at $52 Qatar at $51 Kuwait at $45.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.