In the next five years, the level of financial reserves to the oil exporters will exceed $1 trillion.
Arab oil exporters are seeing a windfall from high energy prices that will buoy their economies and replenish their financial reserves this year and next, according to a report released Wednesday by the International Monetary Fund.
Higher energy prices spell fortune for the region’s oil producers, like Saudi Arabia where economic growth is expected to hit 7.6 per cent this year.
Kuwait, another country highly dependent on oil revenue, is forecast to see 8 per cent growth in 2022, a notable reversal from the just 1 per cent growth its economy saw last year and the nearly 9 per cent contraction its economy saw in 2020. The IMF’s figures forecast that Iraq will see the biggest expansion to its economy in the region, with 9.5 per cent growth projected this year.
As a whole, the IMF expects that in the next five years, the level of additional inflows and financial reserves to Mideast oil exporting countries will exceed $1 trillion, stated Jihad Azour, director of the Middle East and Central Asia department at the IMF.
The IMF’s projections are based on a number of assumptions, including that the price of oil will average roughly $107 a barrel in 2022 and trade around $92 a barrel in 2023.
Saudi Arabia The Major Beneficiary Of High Oil Prices
Gulf Arab oil exporting states are projected to produce some 18 million barrels of oil per day this year, with around 14 million barrels of that for export. Most of the barrels will be produced and exported by Saudi Arabia.
Rystad Energy, a research and business intelligence company, says Saudi Arabia will be the largest beneficiary of the higher oil prices and is expected to receive more than $400 billion from its oil and gas exports, an increase of almost $250 billion from 2021. The firm said Iraq follows with about $200 billion, a doubling of its income compared to 2021.