Pressures on the Revenues of the GCC Countries Due to the Collapse of Oil Prices
Experts of Fitch International credit rating agency said on Monday 9 March 2020 that the collapse of oil prices will put pressure on the financial returns of the Gulf Cooperation Council countries, and the agency said that the financial parity prices for all Gulf countries are much higher than the Brent price of 35 dollars per barrel.
A decrease in crude oil prices by $10 reduces financial returns in the Gulf by 2% to 4% of GDP, and the parity price exceeds $80 per barrel for Bahrain, Oman, and Saudi Arabia, while the highest-ranked countries, especially Kuwait, Qatar, and Abu Dhabi enjoy great protection.
The Gulf Cooperation Council, whose countries depend heavily on oil and gas revenues, includes six countries: Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain, Qatar and the Sultanate of Oman.
The parity price for the Gulf Cooperation Council countries during the past year was $64 a barrel, and Qatar had the lowest exchange rate between the GCC countries in 2019 as it reached $48.8 a barrel and about $45.7 in 2020, while Bahrain had the highest price at $95.14 a barrel, according to Monitor the Middle East.
On Monday, March 9, 2020, oil prices collapsed by more than 30%, reaching their lowest levels since 2016 as a result of the dissolution of the OPEC and Russia alliance.