Petrostates stare into the abyss of a life without oil cash

[Tom Kirkman + 8,860]

Expecting upheaval, uprisings and open warfare soon in Middle East petrostates, where countries that derive 80% or so of their income from oil revenue are looking at catastrophes.

You can't beat a dead one trick pony.  Well you can, but to no avail.  I expect one trick pony oil states to undergo significant protests, crackdowns by their authoritarian and dictatorial governments, and open warfare in attempts to spike oil prices.  Probably a few absolute religious dictators and their cronies will get their heads separated from their necks.

Now would be the perfect time for Iran to close the Strait of Hormuz.  Iran has been threatening this for decades, let them go ahead.  Don't be surprised if the global reaction is mostly "Meh".

 

Nigeria stares into the abyss of a life without oil cash

Africa's most populous nation is getting almost nothing from its massive oil wealth.

While headline Brent-crude futures have rallied sharply in the past few weeks - rising above $30 a barrel at one point earlier this week - a glut of Nigerian oil is fetching about $10 less than that. It's a level that means fiscal revenue for the continent's biggest economy has cratered.

"It's now dawned on everyone across the country how severe this threat is," said Andrew Nevin, a partner and chief economist for Nigeria at PricewaterhouseCoopers. "There is a possibility that at least for three to five years, there's going to be no revenue flowing to the government from oil."

Nigeria's plight is playing out across the world: from Venezuela to Iraq and Iran, petrostates are grappling with the same bleak future -- one where their prized commodity is worth a much less than it was, and where private companies often still want their cut.

Nigeria is faced with the twin challenge of dealing with the covid-19 pandemic and a slump in the price of crude, Finance Minister Zainab Ahmed said in a webinar on Tuesday.

"It's a double whammy," she said. "This has set us back significantly."

Global efforts to fight the spread of coronavirus have driven oil prices so low that they no longer cover the cost of pumping barrels for many companies in Nigeria -- let alone providing the government with crucial cash.

Nevin of PwC said at a webinar on April 30 that when oil prices are at around $20 a barrel, Nigeria gets very little for its oil. The commodity normally contributes about half of fiscal revenue.  ...

 

... "A concern is social stability in oil-producing areas as weaker government support and rising unemployment lead to social discontent," said Jeremy Parker, head of business development for West Africa at Citac Ltd. "There is a risk that this could lead to spikes in incidences of politically-motivated vandalism or theft, leading to production disruption."  ...

 

[BLA + 1,666]

On 5/9/2020 at 1:41 PM, Tom Kirkman said:

Expecting upheaval, uprisings and open warfare soon in Middle East petrostates, where countries that derive 80% or so of their income from oil revenue are looking at catastrophe

 

Quote

Now would be the perfect time for Iran to close the Strait of Hormuz.  Iran has been threatening this for decades

.  .  .  .   oil is fetching about $10 less than that. It's a level that means fiscal revenue for the continent's biggest economy has cratered.

"It's now dawned on everyone across the country how severe this threat is," ó

Nigeria's plight is playing out across the world: from Venezuela to Iraq and Iran, petrostates are grappling with the same bleak future --

China will be more than happy to help them out . . .    

Edited May 11, 2020 by BLA