Earnings from members of the Organization of Petroleum Exporting Countries (OPEC) are expected to fall to $341 billion in 2016, according to U.S Energy Information Administration (EIA)’s price forecasts.The 14-member cartels’ net export revenue in 2015 was at $404 billion, a 46% decline from $753 billion earned in 2014 and is still expected to increase to $427 billion in 2017.

EIA said that the decrease in OPEC members’ revenue is as a result of the fall in crude oil prices as the monthly average Brent spot price fell from $112 per barrel in June 2014 to $38 per barrel in December last year.“The effects of recent declines in net oil export revenue on the economies of each OPEC member state depend on the importance of oil export revenues and the existence of other financial assets. Petroleum exports by OPEC members accounted for between five (Indonesia) to 99 per cent (Iraq) of total export revenues in 2015. Generally, countries with sizeable financial assets, such as the Persian Gulf States (Saudi Arabia, Kuwait, Qatar, and the United Arab Emirates), are affected to a lesser degree than other oil-producing countries, such as Iraq, Nigeria, and Venezuela that do not have large financial reserves,” it explained.

It added that although crude oil prices have been the main reason behind OPEC’s lower revenue since mid-2014, unexpected production outages among some members have also added to the lower export earnings.“Some of these outages are the result of political factors, such as the sanctions-related production shut-ins in Iran between 2011 and early 2016, when roughly 0.8 million barrels per day (bpd) remained off the market. In Venezuela, crude oil production has declined sharply since the end of 2015, as oil service companies have largely stopped work in response to a lack of payment by state-owned Petroleos de Venezuela S.A., and oil production may continue to decline in the near term,” it said.

Other unexpected outages have been attributed to armed conflict and militant activity in countries such as Libya and Nigeria.Libya has made efforts to sustain crude oil production and exports since 2011 and recently, rival factions in the country have fought for control of the country’s oil export terminals. The lack of oil export outlets has resulted in the shutting in of most of the country’s production capacity.However in Nigeria, persistent militant attacks on oil and natural gas infrastructures since the beginning of this year have resulting in more shut-in production, the Guardian reports.

Anita Fatunji