Saturday, December 20, 2014

Which Countries are WINNERS and LOSERS from the Oil Plunge? Find Out ...

Oil prices traded near a five-year low Tuesday, as global supply continued to outstrip demand. Since the start of the year, prices have plummeted close to 50%.
That decline has produced windfalls — or disasters — for a number of countries.
Here's a look at four of the biggest winners and four major losers:
The losers
Existing sanctions on Iran for its nuclear program are keeping about 1 million barrels of Iranian oil off of world markets every day, according to the International Monetary Fund. With Iran already exporting less oil now than it would ordinarily, plummeting prices have further squeezed the country's weak economic outlook. Iran's government budgeted for an average crude oil export price of $100 per barrel, according to Al-Monitor, a website that features Mideast analysis. A recent report from the Institute of International Finance concluded that since sanctions took effect in 2012, Iran's gross domestic product has dropped 8.6%.
Africa's largest economy relies heavily on a high oil price, and crude is its biggest source of income, accounting for about 75% or $50 billion, of the Nigerian government's total annual revenue, according to a report by analysts at Deutsche Bank. The bank also estimates that Nigeria requires an oil price approximately twice the current level to achieve a balanced budget. Its currency, the naira, has lost 8% of its value recently, as oil prices fell. Adding to Nigeria's woes, two oil unions went on strike this week, in part because the drop in oil prices has forced the government to slash its budget by 10%.
Its oil and other energy exports total approximately $300 billion annually. The International Energy Agency estimates that 68% of Russia's foreign currency earnings come from the oil-export business, and around 50% of its annual budget is underwritten by the industry. Russia's economy has been reeling from sanctions imposed by the West over its actions in Ukraine, and official Russian forecasts suggest GDP could drop 0.8% next year. On Tuesday, the ruble fell to a new low despite a move by Russia's central bank to boost a key interest rate to halt the slide.
Find out the rest of the Winners and Losers HERE and watch a related video below:

If you like what you see, please "Like" us on Facebook either here or here. Please follow us on Twitter here.

No comments: