pixabay
The talks were preceded by reports that the draft document had been agreed by all countries, and final negotiations should take no more than two hours. However, Saudi Arabia's position has changed dramatically on the day of the meeting: Riyadh demanded that the document was signed by all the OPEC countries, including Iran and Libya. Iran, in turn, reiterated that it intends to raise production to pre-sanction level of 4 million barrels per day, and Libya has no control over its oil production.
As a result of the 13-hour debate, including a formal ministerial meeting lasting about 5.5 hours, the parties were forced to admit that it was not possible to reach an agreement. The next meeting of oil-producing countries on the production freeze will be held in June in Vienna.
Watching oil’s fall
July 1, 2014, a barrel of Brent crude cost $ 112.93. The prices began to lower in September 2014 after publishing a monthly report from the International Energy Agency. According to the document, the global oil demand in 2014 was to be reduced from 92.9 million to 92.6 million barrels per day.
October 9, the cost of Brent crude oil fell below $ 90 per barrel. In 2015, the decline continued in the background of successful negotiations with Iran on its nuclear program and agreement to lift economic sanctions against the Islamic republic. The fall was occasionally giving way to slight increases - after the publication of data on oil production decline in the US, due to the instability in the Middle East and other factors. January 18, 2016 recorded lowest price over the last 13 years - $ 27.72 per barrel.
This was followed by the growth of quotations in late March - early April in anticipation of accelerated negotiations to freeze production in oil-producing countries.
Who was hit the most
GDP of Russia in 2015 fell by 3.7%. Inflation at the end of the year was 12.9%. In real terms, incomes fell by 4% compared to 2014 year. The average salary for 2015, in real terms, decreased by 9.5%. International reserves of the country in 2015 declined by $ 17.1 billion, or 4.4% (decline of 24.4% previous year).
Oil exports brought 96% of foreign exchange earnings to Venezuela. The country's budget to pre-crisis years was calculated based on the price of $ 110-120 per barrel. In January 2016, President Nicolas Maduro declared a state of emergency in the economic situation.
The anti-crisis program of the country proposed a significant increase of gasoline prices, actual devaluation of the national currency, introduction of a new exchange rates system and an increase in workers' wages by about 20%. Citizens’ dissatisfaction with the current situation was one of the main reasons for the defeat of the United Socialist Party of Venezuela, headed by Maduro and its supporters. In the third quarter of 2015, inflation amounted to 141.5%. According to experts, it can exceed 700% in 2016.
Nigeria is the largest oil producer in Africa (about 2 million barrels per day) and is among the five leading exporters of liquefied natural gas. This country imports huge volumes of petroleum products due to lack of refineries capacities.
The fall in oil prices has led to a massive energy crisis in the country. The shortage of fuel for generators paralyzed transport and de-energized many homes and businesses. Half of the states in the country found themselves unable to pay the salaries to civil servants. Central Bank of Nigeria announced devaluation of the national currency. The country requested financial assistance from the World Bank and the African Development Bank for a loan of $ 3.5 billion to help the country cope with the budget deficit.
Algeria needs the price of oil at $ 111 to maintain government spending at the same level. In October 2015, the parliament had a fight during the debate on the need for tax increases and freeze hiring in the public sector. Due to the reduction in investment, oil production in Algeria is falling - it is expected that in the next decade, it will be reduced by 20%, to 1.3 million barrels per day.
Oil revenues generate 73% of revenues in Saudi Arabia. The budget for 2016 was planned with a deficit of 326.2 billion rials (about $ 87 billion). Total income of the country in 2016 is expected by 513.8 billion riyals, or $ 137 billion, that is, about $ 25 billion less than in 2015.
In connection with the fall of oil prices, Riyadh was forced to sharply reduce the budget expenses: for 2016, they are planned in the amount of 840 billion riyals, or $ 224 billion. This is about $ 36 billion less than in 2015. The sequestering affected primarily the energy sector.
Oil exports provide 90% of Kuwait's revenues. In 2015, losses from them amounted to about 60%. As a result, the country had to set first budget deficit in 16 years - the gap between revenue and expenditure parts of the 2016 fiscal year could reach $ 23.2 billion.
After the oil prices started to fall, Irak reduced public spending for 2015 by almost 20% - from $ 127.3 billion to $ 103 billion. In March 2016, the Iraqi authorities have also attracted a loan of $ 220 million for the purpose of repayment of the budget deficit. Earlier, the Ministry of Finance of the country reported that, due to the low oil prices, they expect a budget deficit of 24.1 trillion Iraqi dinars (about $ 20 billion).
As a result of the 13-hour debate, including a formal ministerial meeting lasting about 5.5 hours, the parties were forced to admit that it was not possible to reach an agreement. The next meeting of oil-producing countries on the production freeze will be held in June in Vienna.
Watching oil’s fall
July 1, 2014, a barrel of Brent crude cost $ 112.93. The prices began to lower in September 2014 after publishing a monthly report from the International Energy Agency. According to the document, the global oil demand in 2014 was to be reduced from 92.9 million to 92.6 million barrels per day.
October 9, the cost of Brent crude oil fell below $ 90 per barrel. In 2015, the decline continued in the background of successful negotiations with Iran on its nuclear program and agreement to lift economic sanctions against the Islamic republic. The fall was occasionally giving way to slight increases - after the publication of data on oil production decline in the US, due to the instability in the Middle East and other factors. January 18, 2016 recorded lowest price over the last 13 years - $ 27.72 per barrel.
This was followed by the growth of quotations in late March - early April in anticipation of accelerated negotiations to freeze production in oil-producing countries.
Who was hit the most
GDP of Russia in 2015 fell by 3.7%. Inflation at the end of the year was 12.9%. In real terms, incomes fell by 4% compared to 2014 year. The average salary for 2015, in real terms, decreased by 9.5%. International reserves of the country in 2015 declined by $ 17.1 billion, or 4.4% (decline of 24.4% previous year).
Oil exports brought 96% of foreign exchange earnings to Venezuela. The country's budget to pre-crisis years was calculated based on the price of $ 110-120 per barrel. In January 2016, President Nicolas Maduro declared a state of emergency in the economic situation.
The anti-crisis program of the country proposed a significant increase of gasoline prices, actual devaluation of the national currency, introduction of a new exchange rates system and an increase in workers' wages by about 20%. Citizens’ dissatisfaction with the current situation was one of the main reasons for the defeat of the United Socialist Party of Venezuela, headed by Maduro and its supporters. In the third quarter of 2015, inflation amounted to 141.5%. According to experts, it can exceed 700% in 2016.
Nigeria is the largest oil producer in Africa (about 2 million barrels per day) and is among the five leading exporters of liquefied natural gas. This country imports huge volumes of petroleum products due to lack of refineries capacities.
The fall in oil prices has led to a massive energy crisis in the country. The shortage of fuel for generators paralyzed transport and de-energized many homes and businesses. Half of the states in the country found themselves unable to pay the salaries to civil servants. Central Bank of Nigeria announced devaluation of the national currency. The country requested financial assistance from the World Bank and the African Development Bank for a loan of $ 3.5 billion to help the country cope with the budget deficit.
Algeria needs the price of oil at $ 111 to maintain government spending at the same level. In October 2015, the parliament had a fight during the debate on the need for tax increases and freeze hiring in the public sector. Due to the reduction in investment, oil production in Algeria is falling - it is expected that in the next decade, it will be reduced by 20%, to 1.3 million barrels per day.
Oil revenues generate 73% of revenues in Saudi Arabia. The budget for 2016 was planned with a deficit of 326.2 billion rials (about $ 87 billion). Total income of the country in 2016 is expected by 513.8 billion riyals, or $ 137 billion, that is, about $ 25 billion less than in 2015.
In connection with the fall of oil prices, Riyadh was forced to sharply reduce the budget expenses: for 2016, they are planned in the amount of 840 billion riyals, or $ 224 billion. This is about $ 36 billion less than in 2015. The sequestering affected primarily the energy sector.
Oil exports provide 90% of Kuwait's revenues. In 2015, losses from them amounted to about 60%. As a result, the country had to set first budget deficit in 16 years - the gap between revenue and expenditure parts of the 2016 fiscal year could reach $ 23.2 billion.
After the oil prices started to fall, Irak reduced public spending for 2015 by almost 20% - from $ 127.3 billion to $ 103 billion. In March 2016, the Iraqi authorities have also attracted a loan of $ 220 million for the purpose of repayment of the budget deficit. Earlier, the Ministry of Finance of the country reported that, due to the low oil prices, they expect a budget deficit of 24.1 trillion Iraqi dinars (about $ 20 billion).
