Connect with us
nairametrics
UBA ads

Business News

Here are 7 oil producing countries that have been most affected by COVID-19

Although the energy industry provides more than 10 million jobs with almost 8% of the country’s GDP, the US is less dependent on oil compared to average OPEC countries. However, its shale industry remains vulnerable to severe credit crunch and bankruptcies.

Published

on

OPEC+ Alliance, US, Russia, Canada, Mexico reach historic deal to cut 13.4 million bpd, Oil market still uncertain over the OPEC+ deal as prices react positively, 7 oil producing countries most affected by covid-19, see where Nigeria is placed

The Coronavirus pandemic that started as an epidemic in the Chinese city of Wuhan, has rapidly evolved from a global health challenge to an economic crisis with destabilising effects on countries, businesses, and individuals.

The world’s leading oil-producing countries appear to be the hardest hit, having been forced to contend with the dual shock of the pandemic and the crash in oil prices. This is mainly the case for countries in Africa (home to 7 of OPEC’s 13 member countries) who have to contend with both struggling economies and weak health systems. For the likes of Russia, Iran, and the United States, the effect has mainly been the health hazard caused by the virus.

UBA ADS

Focus on the world’s oil producers who have been hardest hit by COVID-19; where they stand now

  • The United States: The US has so far recorded 1.38 million COVID-19 infections with 82,018 deaths, the highest for any country in the world. Lockdown in at least 40 states has helped to slow down the spread of the virus, with the rate of hospitalization on a steady decline for 3 weeks now.
    The US, which is the world’s biggest oil producer with 13.1 million barrels of crude and lease condensate per day, had its daily production drop by 900,000 barrels in April. This is mostly due to independent curtailments by major shale producers.

(READ MORE: Crude oil prices surge higher, Brent crude nears $30 per barrel)

Although the energy industry provides more than 10 million jobs with almost 8% of the country’s GDP, the US is less dependent on oil compared to average OPEC countries. However, its shale industry remains vulnerable to severe credit crunch and bankruptcies.

Nigeria Oil revenue, CBN, Crude Oil, Nigeria's crude oil sale in Q3 2018,7 oil producing countries most affected by covid-19, see where Nigeria is placed

GTBank 728 x 90
  • Russia: With 232,243 COVID-19 infections, Russia ranks 3rd highest in the world, though its death rate which is 2,116, is the lowest for countries with more than 100,000 infections. On Monday, the Russian President announced an end to the country’s 6 weeks lockdown. After weeks of stand-off, Russia finally agreed to OPEC+’s recommendation for production cuts with the country’s energy minister directing oil companies to reduce production by 20% each.
    Russia, with 10.9 million barrels daily production and 2nd highest in the world, is feeling the hit from oil price collapse. Although the country’s main oil brand, Urals, has held up better than American WTI, the current price of about $30 is considerably lower than $40 per barrel level it needs to balance its budget as per IMF estimates.
  • Saudi Arabia: With 42,925 infections and 264 deaths, Saudi Arabia, last month, partially lifted the curfew in all regions except in Mecca, where they maintained 24-hour curfew.
    As OPEC’s largest producer and one of the original members, Saudi Arabia is the coalition’s de facto leader. It is also one of the producers who are feeling the biggest squeeze of the energy crisis, thanks to its high dependence on oil (50% of GDP) and fiscal breakeven of $76.1 per barrel. The kingdom had assumed an oil benchmark price of $60 per barrel in its 2020 budget.

(READ MORE: Oil Crisis: OPEC deal gets further boost from African Petroleum Producers’ Organization)

  • Iraq: This country is one of the first to get into lockdown and also ease restrictions. It is also OPEC’s second-largest oil producer and home to some of the world’s largest known oil reserves. The country had been cranking up production to a record 4.88 million barrel per day last year at a time when OPEC was trying to lower production. Iraq needs an oil price of $60.4 per barrel to balance its books.
  • Crude Oil worker, OPEC, oil prices, Bulls hit back to support US crude oil amid panic sell- offs in global equity markets, Nigeria’s local oil players smashed by low crude oil prices, 7 oil producing countries most affected by covid-19, see where Nigeria is placed
  • Iran: With 110,767 infections, they are by far the highest for an OPEC country and the 10th highest in the world. Iran has started to ease restrictions in order to support the economy that had already been battered prior to the pandemic. Recall that Iran’s oil production was nearly halved after US President, Donald Trump pulled out of the landmark nuclear deal in 2018. However, the country is still an important global oil player with 2.02 million barrels per day production in March. The IMF estimates that Iran needs a massive $389 a barrel to balance its books, a situation that is not helped by reduced Chinese crude oil imports from the country.

READ MORE: What banks might do to avoid getting crushed by Oil & Gas Loans

  • Nigeria: Africa’s most populous country and largest economy, has 4,641 infections with 151 deaths. Last week, Nigeria started gradual easing of the lockdowns in at least 2 major states and its Federal Capital Territory, and there has been an increase in new cases and deaths since the restrictions were lifted. Nigeria is Africa’s largest oil producer, pumping about 1.78 million barrels per day in March. Oil sales contribute about 90% of the country’s foreign exchange earnings, 60% of the revenue, and 8% of GDP.
    With a high fiscal breakeven of $144 per barrel, the country is finding itself in a critical situation, with IOCs needing $35-$40 per barrel to break even. The country just got a $3.4 billion from IMF, with about $3.5 billion loan request still outstanding with AfDB and World Bank.
  • Angola: Angola, with just 45 infections and only 2 deaths, is moving to tighten lockdown restrictions in order to contain increasing cases. The country is Africa’s 2nd largest crude oil producer with 1.4 million barrels per day in March. The country is also one of the better-placed producers in the continent, with IMF estimating that it needs an oil price of $55 per barrel for fiscal breakeven.

onebank728 x 90
Patricia

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Real Estate and Construction

Nigerian Real Estate and COVID in 19 Slides

Validate investment cases and focus energies on property sectors that are more resistant to shocks.

Published

on

Nigeria is rapidly approaching an economic crisis as the COVID-19 global pandemic has put the world on lockdown and sent Brent crude oil prices to a 20-year low. Spurred by lower global demand and reliance on oil exports for 90% of its foreign exchange income, Nigeria’s economy and her fragile currency are being pushed to their breaking point.

In this report, we will focus on the impact this pandemic will have on the real estate market in Nigeria. So far, key themes include mass concessions, re-negotiation and restructuring activity, slowed decision making, stretched out project deliveries due to the lockdown and more. After outlining the potential property sector losers, hospitality and retail most especially, alongside potential winners (industrial and healthcare), we discuss the impact of the COVID-19 pandemic on individual property sectors and the direction of rentals, capital markets and more.

UBA ADS

Within this uncertain environment, we recommend that market participants including asset owners, real estate service providers and others stress test their businesses at varying levels of reduced income, use the downtime for market research to validate investment cases and focus energies on property sectors that are more resistant to shocks.

Download the report through the link in the header.

GTBank 728 x 90
Patricia
Continue Reading

Appointments

IMF appoints Ceda Ogada as new director and secretary of the fund 

Before joining the IMF, Ogada worked at the United Nations Conference on Trade and Development.

Published

on

The International Monetary fund (IMF) has announced the appointment of Mr. Ceda Ogada as the Secretary of the Fund and Director of the Secretary’s Department with effect from September 1, 2020, following the retirement of the former Secretary, Mr Jianhai Lin. 

This was disclosed in a press statement by IMF on Wednesday, July 15, 2020. 

UBA ADS

While making the announcement, Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), said, Ceda has outstanding institutional knowledge, strategic and intellectual heft, and people leadership. His unparalleled ability to bring people together, combined with his profound appreciation of the Fund’s institutional history and legal principles, as well as a strong service orientation, will help the Fund to even more effectively serve our member countries in a very challenging economic environment.” 

Mr. Ogada joined the IMF’s Legal Department in 1999 and rose through the ranks to become Deputy General Counsel in 2014. During this time, he has worked on virtually all aspects of the Fund’s work, including advising on the governance of the Fund, on country operations, helping to develop Fund policies and implementation guidance, and providing technical assistance to member countries.  

According to the statement, ‘’Some of the key projects that he has worked on include the Fund’s enhanced policy to address governance and corruption issues, ensuring the adequacy of the Fund’s lending resources, reforms in lending policy such as the establishment of the Flexible Credit Line (FCL) and the Catastrophe Containment and Relief Trust (CCRT), reviews on surveillance policy and capacity development strategy and transparency, archives and communications policies.’ 

GTBank 728 x 90

The new Secretary of the fund was heavily involved in the work on euro area crisis countries during the global financial crisis. Recently, he has led the Legal Department in promoting good governance and transparency in several countries, together with the use of emergency financing for the COVID-19 crisis. 

Before he joined IMF, Mr. Ogada worked at the United Nations Conference on Trade and Development as a legal expert and also before that he was in private legal practice in the United States. He holds a Juris Doctor from Harvard Law School and a B.A. in history from Dartmouth College. Mr. Ogada is a citizen of Kenya. 

 

onebank728 x 90

Patricia
Continue Reading

Economy & Politics

Just in: Suspended EFCC boss, Ibrahim Magu, finally released from detention

Magu’s lawyer confirmed his release from the custody of the DSS.

Published

on

EFCC to help AMCON recover bad debts

The suspended acting Chairman of the Economic and Financial Crime Commission (EFCC) has been released from police custody after about 10 days in detention.

According to a monitored report, this was confirmed by his lawyer, Tosin Ojaomo, who said that the EFCC boss is no longer under custody.

UBA ADS

The suspended EFCC boss was invited by the presidential probe panel headed by Ayo Salami, a retired President of the Appeal Court to the Presidential Villa in Abuja on July 6 over allegations bordering on corruption and financial misconduct.

He was later moved to Area 10 Force Criminal Investigation Department (FCID) of the police in Abuja where he has since been detained.

Just earlier today, the Inspector-General of Police, Mohammed Adamu, asked Magu, to direct his bail application to the presidential probe panel.

GTBank 728 x 90

This was in response to a request by Mr Oluwatosin Ojaomo, Magu’s legal representative, who asked the IGP to grant bail to his client on self-recognisance after the suspended EFCC chief had spent four days in custody.

But in a letter dated July 14, 2020, and addressed to Mr Ojaomo, the IGP said the police force is not investigating and detaining Magu, so, it cannot grant the bail request.

It also advised the lawyer to redirect his request to the chairman of the presidential probe panel for appropriate action.

onebank728 x 90

Patricia
Continue Reading
Advertisement
Wealth.ng
Advertisement
Advertisement
Patricia
Advertisement
Advertisement
devland
Advertisement
devland
Advertisement
devland
Advertisement
Advertisement
financial calculator
Advertisement
devland
Advertisement
app
Advertisement