OPEC oil revenue to fall to $341 bln in 2016: EIA

OPEC members’ revenue is expected to drop to $341 billion in 2016 before rising to $427 billion next year, according to the latest estimates from the US Energy Information Administration (EIA).

Members of the producer group earned $404 billion in net oil export revenue last year – a 46 percent decline from 2014, and the lowest level recorded since 2004.

Revenues have fallen in line with the plunge in crude prices, as the monthly average Brent spot price went from $112 per barrel in June 2014 to $38/bbl in December last year.

Low income from oil carries significant implications for the public finances of member countries that depend heavily on crude sales, even though effects may vary across the states, the EIA said.

Countries with sizeable financial assets, such as the GCC nations are affected to a lesser degree than other producers like Iraq, Nigeria, and Venezuela reserves.

Alongside declining crude prices, unplanned supply outages also contributed to lower earnings among OPEC member countries, the agency said in its report.

Some of the outages were caused by political factors, such as sanctions-related production shut-ins in Iran between 2011 and early 2016. Others, like in the case of Libya and Nigeria, have been due to armed conflict and militant activity.

Libya, for example, has struggled to maintain crude oil production and exports since the fall of the Qaddafi regime in 2011, the EIA said, estimating that the North African country’s effective production capacity currently stands at 1.3 million barrels per day (mbd), with roughly 1 mbd shut in. Crude production was 0.3 mbd last month.

Meanwhile in Nigeria, militant groups stepped up attacks since the beginning of the year in the Niger Delta region.

The EIA said it estimates that Nigeria's production shut-ins were 0.7 mbd in July, with production averaging less than 1.5 mbd. The country’s effective production capacity stands at roughly 2.2 mbd, the agency said.

In Venezuela, on the other hand, crude production has declined sharply since the end of last year, as oil service companies largely stopped work in response to a lack of payment by state-owned Petroleos de Venezuela (PdVSA).

As a result, the country’s oil production declined from an estimated 2.4 mbd in December last year to 2.1 mbd in July 2016, with further declines anticipated till the end of 2017.