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Kuwait, Qatar, Saudi Arabia and UAE to enjoy windfall gains
KUWAIT CITY, May 14: According to a report in MEED magazine, the rise in oil prices to very high levels and the improvement of the oil resources of the Gulf Cooperation Council countries can be considered as advantages that resulted from the war between Russia and Ukraine, reports Al-Anba daily. In an analysis carried out by the former editor-in-chief Edmund O’Sullivan, it was stated that oil exporters in the Gulf Cooperation Council countries can already consider themselves as one among the winners, as it is expected that OPEC’s oil production will rise this year, most of the increase will return to Kuwait, Qatar, Saudi Arabia and the UAE, and that these countries will enjoy windfall gains of at least $100 billion in 2022, which could approach 10 percent of their projected GDP, due to the Ukraine crisis.
MEED reviewed what resulted from the war that led to the rise in the price of oil above $130 per barrel in early March. It explained that there is consensus that it will reach an average of about $100 in 2022, i.e. 50 percent higher than the expectations of the International Monetary Fund, compared to less than $70 last year. Demand is expected to slow, but it will still be above 100 million barrels per day in 2022. Unless the war ends quickly, oil prices in excess of $90 may continue into 2023, boosting growth and export earnings across the GCC.
MEED stated that Saudi Arabia is the only one among the four countries that projected a budget deficit this year. The kingdom may be able to eliminate the deficit and reduce government debt to less than 30 percent of GDP. This comes as the European Union intends to reduce Russian gas imports, which means an increase in the demand for other sources. Only Qatar can benefit greatly from this development, but not in the near future.
he magazine went on to explain that the influence of the Gulf member states of OPEC on global energy policies is strengthening. These countries are now committed to the OPEC+ production agreement with Moscow to maintain relations that have developed since the dissolution of the Soviet Union in 1991. Despite the resentment that the United States feels about the refusal of the Gulf states to stand by it, it avoids public disagreement with it, indicating that it is a balancing process that bears fruit for the Arabian Gulf states. At the end of its analysis, the magazine states that it believes this is a horrific year for the Ukrainians, and a bad year for the world as a whole, but the Arabian Gulf states are working to ensure they emerge stronger than when they had started.