OIL SHOCK ON PRODUCING COUNTRIES

1. Algeria: Algeria with an official unemployment rate of 15 percent depends on oil and gas imports for 85 percent of its foreign exchange revenue.  Given Algeria’s yawning trade deficit, the IMF expects reserves to fall below $13 billion in 2021. The fragile government in Algiers is now bracing for budget cuts of 30 percent. One thing that Algeria has going for it is that it has virtually no foreign debt. Algeria needs $109 per barrel of average Brent crude in 2020 to balance its budget
2. Angola: Angola’s debt burden has surged to 111 percent of GDP in 2019. Before the oil price collapse, Angola was already spending between one fifth and one third of its export revenues on debt service. That burden is now bound to increase significantly. Ten-year Angolan bonds are trading at 44 cents on the dollar. Having been downgraded to a lowly CCC+, it is now widely considered to be at imminent risk of default.The physical infrastructure to store oil is inadequate. Angola has a breakeven price of $55 per barrel.
3. Bahrain: Bahrain requires $96 a barrem to balance its budget. The fall will be 4-8% of GDP.
4. Brazil: Petrobras in Brazil has $78.9 billion of net debt as of the end of 2019 and one of the highest debt burdens of all oil firms. Its bonds trade at junk levels.
5. Ecuador: In oil-dependent Ecuador, President Lenin Moreno has called the energy market collapse the country’s “most critical moment in its history.” Ecuador is cutting government salaries. Ecuador is the Latin American oil producer facing the most urgent problems. The government has agreed with investors to delay $800 million in interest payments on its $65 billion foreign debt. This means that Ecuador is the second Latin American country after Argentina to enter technical default this year.
6. Iraq: Iraq will be harder hit than almost any other oil-dependent state, according to the International Energy Agency. About 90 percent of the government’s revenue comes from oil, and it relies on that money to support a payroll of more than four million workers as well as payments to pensions and welfare for the poor. Iraq cannot meet the May payroll let alone pay for pensions, subsidies and its other operations. The income of Iraq will decrease by around 70% to $30 billion this year due to the low oil prices. Iraq's economy is anticipated to contract by 0.3%, instead of growing by 3.2%. Iraq needs a $60 a barrel to balance its budget.
7. Iran: Iran's economy is expected to shrink by 8.4% this year, instead of 5.1%. Iran needs a whopping $ 195 per barrel to balance its budget.
8. Kazahstan: Kazahstan needs $58 per barrel this year to balance its budget. The decline will be less than 3% of GDP.
9. Kuwait: Kuwait's economic growth expectation is lowered to 0.8% from 2.8%. Kuwait is fairly insulated with its sovereign wealth fund. Fiscal revenues and exports will decline by more than 10% of 2019 GDP. 
10. Libya: Libya needs around $ 100 per barrell to balance its budget this year. 
11. Malaysia: Petronas has accounted for more than 15 percent of the government’s total revenue over the last five years. It has been put on a negative outlook by Fitch. But like its government, it maintains a solid A- bond rating.
12. Mexico: The federal budget relies heavily on oil production and exports, which means government income will now be sharply diminished. Mexico’s grand plans to develop the country have been thrown into disarray.  Mexico needs $ 49 per barrell to balance its budget.
13. Nigeria: Nigeria derives 90 percent of export earnings and more than two-thirds of government revenue from oil sales. Nigeria has requested $6.9 billion in emergency funding from international lenders. In March, the rating agency Standard & Poor’s lowered Nigeria’s sovereign debt rating to B-. This will raise the cost of borrowing and slow economic growth in a country in which more than 86 million people, 47 percent of the population, live in extreme poverty—the largest number in the world in the world. Furthermore, with 65 percent of government revenues devoted to servicing existing debt, the government may have to resort to printing money to pay civil servants, further spurring an already high inflation rate caused by food supply shortages. Nigeria needs a breakeven price of $144 per barrel of Brent crude on average to balance its government budget this year. Nigeria is forecasted to see a 75% drop in its revenues from $45 billion to $11 billion level this year.
14. Oman: Oman needs $ 82 a barrel to balance its budget. The fall will be 4 to 8 % of GDP.
15. Qatar: Qatar has a fiscal surplus and its economy is dependent on liquefied natural gas exports so less directly affected by oil prices. Qtatar needs $ 55 a barrell. The fall in GDP will be 4 to 8%. 2020 will be a lost year for LNG.
16. Russia: Russia entered the crisis well prepared, with hard currency reserves and a tight budget put in place as protection against the Western sanctions of the past six years. Russia can tap gold and hard currency reserves that total $565 billion. Russian reserves can support current spending at oil prices of $35 per barrel for six years. Russia  needs an average Brent crude price of $42 per barrel, to avoid running deficits. The decline  will be less than 3% of GDP.
17. Saudi Arabia: Saudi Arabia, the world’s largest crude oil exporter, is as dependent on oil as ever. To balance its budget, the kingdom needs $80 a barrel oil, four times the current price. The kingdom has about $500 billion in foreign currency reserves, which could help cover a budget shortfall for about two years. Saudi Arabia is now estimated to grow by 0.7% this year, down from the previous forecast of 2%. The fall will be 4 to 8% of GDP.
18. United Arab Emirates: UAE now has a growth forecast of 0.6%, down from 1.9%. United Arab Emirates needs a $ 70 per barrell to balance its budget. The UAE is fairly insulated with therir sovereign  wealth fund.
19. United States: U.S. shale producers are already under pressure. They are slashing their budgets and either greatly reducing or stopping drilling altogether. (With shale, drilling new wells is required to maintain production.) U.S. production could be down by almost three million barrels per day by the end of this year. If that comes to pass, the United States will still be a large producer, but well behind Russia and Saudi Arabia, and imports will rise. The economic costs will be high, given the importance of the shale revolution to the overall U.S. economy—accounting altogether for about 2.5 million jobs. Within the United States itself, the government has only a limited set of tools. Unlike Riyadh and Moscow, Washington cannot tell companies how much oil to produce. It does have the option of putting almost 700,000 barrels a day into available space in the strategic petroleum reserve, but it would need congressional authorization to spend the money to do so, and the $2 trillion stimulus package did not include the $3 billion of funding that would be required. (That $3 billion would have likely been a very good investment for the government, doubling in value when oil prices recover in a few years.) The power to regulate output of oil lies with the states, most notably with the Railroad Commission of Texas, which despite its name regulates oil production in that state, which accounts for 40 percent of total U.S. production. The commission has the power to reduce output from wells in the name of preventing “waste,” but the last time it exercised that power was half a century ago. Any effort today to “proration,” as it is called, would be supported by some companies and opposed by others. Outside of the United States, it would be read as a signal that other countries should also implement production cuts.
20. Venezuela: Venezuela is on life support. Venezuela relies on its shrinking crude sales to import food and fuel. The International Monetary Fund forecasts Venezuela’s economy will shrink 15 percent this year, the biggest decline in the region. Venezuela needs around $ 100 per barrell to balance its budget this year.

Outlook

With much of the global economy at a standstill, the oil crisis is going to get worse in the weeks ahead, and the damage will be felt well beyond the oil industry itself. As prices go down and storage fills up, production around the world will decline dramatically. The bulk of the decline will be the result of a market overwhelmed by the sheer fury of the coronavirus and the shutdown of the world economy.