*As Bonny Light steady at $33.88b/d
Following members of the Organization of the Petroleum Exporting Countries, OPEC+, alliance breakup, which lead to a significant slide in the price of Crude oil, members are bleeding over $500 million a day in lost revenue
For the most of the OPEC members, oil remains the highest source of income for them, with this sharp decline, their economy will be significantly affected, some of which such as Iran and Venezuela, are already on the brink.
Nigeria along with Algeria that have been hit massively with the raving Coronavirus outbreak, on Monday stated that the breakdown of the deal will be difficult for producers.
Moreso, others nations, including Saudi Arabia, fiscal budget break-even oil prices were already much higher than the oil price before the most recent collapse.
Brent crude futures were down by as much as 31% to $31.02 on Monday, their lowest since mid-February 2016. At that low, prices were down nearly $20 a barrel from a high before the meeting of OPEC and its allies on March 6.
This means that in total, and based on their average February production, OPEC members lost more than $500 million in revenue, according to Reuters calculations.
Also, Nigeria’s crude oil grade, Bonny Light, rise by $2.75 to $33.88 per barrel in the international market.
OPEC had been pushing for expanding the existing cuts with its allies, known as OPEC+, by an additional 1.5 million barrels per day to over 3 million bpd until the end of the year. Russia turned the proposal down, causing the collapse of the alliance and the start of a price war over market share.
“A $10 a barrel decline in oil prices lowers fiscal revenues by 2-4% of GDP, depending on the country, and fiscal break-even prices are well above current levels for all Gulf Cooperation Council sovereigns,” Jan Friedrich, Head of Middle East and Africa Sovereign Ratings here at Fitch Ratings said.