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2018 OPEC Net Export Revenues Highest Since 2013, But Likely to Decline - EIA

Gasoil News - Published on Tue, 27 Aug 2019

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The US Energy Information Administration estimates that OPEC members earned almost USD 711 billion in net oil export revenues in 2018. The estimate is up 29% from 2017, but about 40% lower than the record high of almost USD 1,200 billion in 2012. The 2018 earnings increase is mainly a result of higher crude oil prices. The Brent spot price rose from an annual average of USD 54 per barrel in 2017 to USD 71 per barrel in 2018. However, EIA forecasts annual OPEC net oil export revenues will decline to USD 593 billion in 2019 and to USD 556 billion in 2020. Decreasing OPEC revenues are primarily a result of decreasing production among a number of OPEC producers.

EIA estimates net oil export revenues based on oil production including crude oil, condensate, and natural gas plant liquids and total petroleum consumption estimates, as well as crude oil prices forecast in the August 2019 Short-Term Energy Outlook. EIA’s net oil export revenues estimate assumes that exports are sold at prevailing spot prices and adjusts the prices for benchmark crude oils forecast in STEO with historical price differentials among spot prices for the different OPEC crude oil types. For countries that export several different varieties of oil, EIA assumes that the proportion of total net oil exports represented by each variety is the same as the proportion of the total domestic production represented by that variety.

Although, OPEC net export earnings include estimated Iranian revenues, they are not adjusted for possible price discounts that trade press reports indicated Iran may have offered its customers after the United States announced its withdrawal from the Joint Comprehensive Plan of Action in May 2018. The United States reinstated sanctions targeting Iranian oil exports in November 2018.

Similarly, EIA does not adjust for Venezuelan crude oil exports to China or India for volumes that are sent for debt repayments to China and Russian energy company Rosneft, respectively, and thus do not generate cash revenue for Venezuela.

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Posted By : Rabi Wangkhem on Tue, 27 Aug 2019
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