Skip to main content

Report: Energy producers in Middle East to earn billions less in oil revenues

The International Monetary Fund's prediction that was reported by The Associated Press is the latest negative outlook for Middle Eastern economies.
GettyImages-1140040873.jpg

The International Monetary Fund (IMF) provided another bleak outlook for oil-producing Middle Eastern economies today.

The IMF said on Monday it expects energy-producing countries in the Middle East will rake in $270 billion less in oil revenues than last year. The COVID-19 pandemic and oil price crisis will make the states’ economies contract by 7.3% overall, the international financial body predicted.

Oil-rich countries in the Middle East have experienced hardship this year due to both the pandemic and falls in oil prices. An oil price war in March between Russia and Saudi Arabia caused global oil prices to plummet. They were further brought down by the massive decrease in global travel resulting from the coronavirus pandemic.

Oil prices have since recovered somewhat amid production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and Russia. Several Middle Eastern countries are OPEC members, including Saudi Arabia, Iran and the United Arab Emirates. The Gulf in particular has large amounts of oil and natural gas.

The IMF’s predictions for the rate of contraction in Gulf economies have increased throughout 2020, and the body expects multiple sectors to shrink.

Business closures have also hurt oil-rich countries in the region, and the IMF is not the only institution to note this. Energy provider IHS Markit found the Saudi and Emirati non-oil sectors contracted significantly in April at the height of the pandemic and accompanying shutdowns. The IMF’s predictions today were based in part on the recession in the large Saudi economy, according to The Associated Press.

Iran has also had to cut oil production, and its storage facilities are nearly full at present. In addition to the pandemic and price war, the Islamic Republic is contending with harsh US sanctions that make it difficult for the country to offloads its fuel.

Join hundreds of Middle East professionals with Al-Monitor PRO.

Business and policy professionals use PRO to monitor the regional economy and improve their reports, memos and presentations. Try it for free and cancel anytime.

Already a Member? Sign in

Free

The Middle East's Best Newsletters

Join over 50,000 readers who access our journalists dedicated newsletters, covering the top political, security, business and tech issues across the region each week.
Delivered straight to your inbox.

Free

What's included:
Our Expertise

Free newsletters available:

  • The Takeaway & Week in Review
  • Middle East Minute (AM)
  • Daily Briefing (PM)
  • Business & Tech Briefing
  • Security Briefing
  • Gulf Briefing
  • Israel Briefing
  • Palestine Briefing
  • Turkey Briefing
  • Iraq Briefing
Expert

Premium Membership

Join the Middle East's most notable experts for premium memos, trend reports, live video Q&A, and intimate in-person events, each detailing exclusive insights on business and geopolitical trends shaping the region.

$25.00 / month
billed annually

Become Member Start with 1-week free trial
What's included:
Our Expertise AI-driven

Memos - premium analytical writing: actionable insights on markets and geopolitics.

Live Video Q&A - Hear from our top journalists and regional experts.

Special Events - Intimate in-person events with business & political VIPs.

Trend Reports - Deep dive analysis on market updates.

All premium Industry Newsletters - Monitor the Middle East's most important industries. Prioritize your target industries for weekly review:

  • Capital Markets & Private Equity
  • Venture Capital & Startups
  • Green Energy
  • Supply Chain
  • Sustainable Development
  • Leading Edge Technology
  • Oil & Gas
  • Real Estate & Construction
  • Banking

We also offer team plans. Please send an email to pro.support@al-monitor.com and we'll onboard your team.

Already a Member? Sign in

The Middle East in your inbox Insights in your inbox.

Deepen your knowledge of the Middle East

Trend Reports

Saudi Crown Prince Mohammed bin Salman (4th R) attends a meeting with Chinese President Xi Jinping (3rd L) at the Great Hall of the People in Beijing on February 22, 2019. (Photo by HOW HWEE YOUNG / POOL / AFP) (Photo credit should read HOW HWEE YOUNG/AFP via Getty Images)
Premium

From roads to routers: The future of China-Middle East connectivity

A general view shows the solar plant in Uyayna, north of Riyadh, on March 29, 2018. - On March 27, Saudi announced a deal with Japan's SoftBank to build the world's biggest solar plant. (Photo by FAYEZ NURELDINE / AFP) (Photo credit should read FAYEZ NURELDINE/AFP via Getty Images)
Premium

Regulations on Middle East renewable energy industry starting to take shape

Start your PRO membership today.

Join the Middle East's top business and policy professionals to access exclusive PRO insights today.

Join Al-Monitor PRO Start with 1-week free trial