OPEC nations’ revenue from petroleum exports plunged below $1 trillion last year for the first time since 2010, highlighting how slumping crude prices hurt countries reliant on oil sales to fund their economies.
The group’s 12 members earned $993.3 billion in 2014, a decrease of 11% from a year earlier, according to the Organization of Petroleum Exporting Countries’ annual report published Tuesday.
Their combined current account balance slumped by 35% to $273.6 billion as the drop in exports was accompanied by an increase in imports, Bloomberg reported.
Before ramping up to about 31 million barrels a day of production this year, OPEC averaged 30.07 million barrels a day in 2014, a decrease of 160,000 barrels a day from a year earlier, the report said. Its share of the global crude oil supply dropped to 32.6% from 33.5% during the same period.
The main reduction in output came from Libya, while the greatest rise was seen in Iraq, OPEC said, citing secondary sources such as shippers, analysts and industry sources.
The last time the value of OPEC exports was below $1 trillion was in 2010, when they were worth about $745 billion. Oil prices then rose and for three years hovered around $100 a barrel, boosting OPEC members’ revenues. The revenue drop shows the strain on the group’s members as they increase pumping at a time of oversupply, following a Saudi Arabia-led strategy of defending market share instead of prices.
OPEC nations agreed on June 5 to keep a production limit of 30 million barrels a day, a level they have exceeded every month since June last year, according to data compiled by Bloomberg.
Global Oversupply
If OPEC keeps pumping at current rates through the third quarter, production will have exceeded demand for the longest period in at least three decades, International Energy Agency data show.
OPEC pumped 31.3 million barrels a day in May and will probably continue to pump around that level “in coming months,” the IEA said in a report on June 11. The agency doesn’t forecast OPEC production.
Producing at that level would imply a global oversupply of 1 million barrels a day in the third quarter and 600,000 barrels in the following three months, according to IEA projections for global demand and non-OPEC supply. That would be the eighth consecutive quarterly surplus, exceeding the current record of six quarters from 1997 to 1998.
The glut could swell further if Iran and world powers reach an accord on the country’s nuclear program by their June 30 deadline, Commerzbank predicts. The country could boost exports by 1 million barrels a day within seven months of sanctions being removed, Oil Minister Bijan Namdar Zanganeh said in Vienna on June 3.
