News : Economy
- Published: Saturday, 27 July 2013
Iran needs the highest oil price among OPEC members to balance its 2013 budget, according to an inter-governmental Arab energy lender.
Iran requires an average crude price of $144 a barrel this year to break even, up from $127 last year, the Arab Petroleum Investments Corp., known as Apicorp, said today in an e-mailed report. Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, will need a lower $98 to balance its budget, according to Apicorp. The kingdom needed $94 last year, the lender said.
The weighted-average oil price to break even this year’s budgets for the 12 members of OPEC is estimated at $105 as the group’s combined budget is set to grow by 7 percent this year, the bank said. OPEC needed $99 last year, it said. Benchmark Brent crude, used to price more than half the world’s oil, averaged about $108 this year.
“The ultimate point is that no OPEC member can expect to set expenditures that depend on other members surrendering market share,” Ali Aissaoui, a senior consultant at the bank said in the report. “Countries would be more likely to spend what they could afford.”With the exception of Kuwait, all members require higher break-even prices this year than a year earlier, the Khobar, Saudi Arabia-based bank said.
Iraq, OPEC’s second-largest producer, needs an oil price of about $123 this year, $10 more than 2012, according to Apicorp. Venezuela, Algeria, Libya, Nigeria and Ecuador all required prices above $110 to balance spending plans, it said.
Saudi Oil Minister Ali al-Naimi said on May 31 in Vienna that Brent at about $100 is a fair price. The kingdom’s budget is based on an average price of $75 a barrel and an export rate of 7.2 million barrels a day, Fahd bin Jumah, a member of the Shura Council that advises the king, wrote in Riyadh newspaper on July 23.
The break-even level represents the price wanted by the government and is usually different from the actual cost of production for oil.
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