The collapse in oil prices will put pressure on government finances in the Gulf, credit rating agency Fitch said on Monday.
Fitchโs top Middle East and Africa sovereign analyst Jan Friedrich said a $10 drop in crude prices lowered fiscal revenues in the Gulf by 2-4% of GDP, depending on the country.
โThe collapse in oil prices will clearly be seen in fiscal numbers for the Gulf,โ Friedrich said.
Fiscal breakeven prices – the oil price needed to balance a countryโs budget – for all Gulf sovereigns are well above the $35-a-barrel that Brent ploughed down to on Monday.
โItโs above $80 per barrel for Bahrain, Oman and Saudi Arabia. However, at least the higher-rated sovereigns, particularly Kuwait, Qatar and Abu Dhabi, have ample buffers, mainly in the form of sovereign wealth funds,โ Friedrich added.
Source: Reuters