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Falling oil prices hit oil exporting nations
10th August 2009
The sharp drop in the world price of crude oil last year was good news for motorists although it takes some time for lower oil prices to feed through to the retail price of diesel and petrol. But for countries highly dependent on oil exports, the decline in world crude prices is having a significant effect on their balance of payments, GDP growth and fiscal balances.
As this excellent BBC article points out, oil accounts for more than 90% of Saudi Arabia’s exports, and nearly 75% of the government’s revenues. Taken as a whole, oil exporting nations could face a 53% fall in revenues this year as oil prices remain low. Little wonder that finance ministers of oil exporters are hoping that crude prices head higher in 2010 on the back of a broader global economic recovery.
More here on price volatility in the world oil market
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.