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According to the latest report, OPEC total budget deficit was fixed for the first time since 1998. The report came out on Wednesday. This result was caused by the long period of low oil prices and low income of cartel’s government from realisation of oil to minimum levels for the last decade.
The report for the last year showed how falling oil prices since 2014 put a negative impact on the economic climate of the cartel. The last total budget deficit of the cartel was $99.6 million versus a surplus at $238.1 million two years ago.
OPEC’s export income fell during this period by 45.8% versus 2014 to $518.1 billion. It is the lowest level since 2005. The statistics account the information provided by Indonesia, which returned to the cartel in 2015, but did not account Gabon’s data.
The cartel’s steps complicated the problems connected with the government budget. Some countries within the OPEC increased their vacancies and infrastructural spending since 2011 on the background of change in Libya’s and Egypt’s governments.
Venezuela suffered most of all in the oil market. The country faced a problem with food, medicaments, and the budget deficit reached 20% of GDP. Venezuela was near a default in February by $1.5 billion and used its foreign-exchange reserves to liquidate a threat.
Nigeria has used almost 20% of its foreign-exchange reserves since late-2014. Saudi Arabia advanced Russia in intraday output (10.19 million barrels) and felt negative impact from the situation. Saudi Arabia increased its budget by 25% in 2011, paying premiums and building cheap homes for government employees.
The government released the data in December which show that budget deficit had reached $98 billion or 15% of GDP. Saudi Arabia is going to cut spending by 14% during this year, using a reduction of subsidies and facilities for oil contractors