Oil consuming countries take advantage of low oil prices to fuel economic growth.
Oil prices shifted below the $80US support level last Thursday and though back up this week, striving to approach the $90US mark, prices were marked at their lowest seen in 4 years.
With little gain on the horizon, some countries are being able to benefit. However, with the effect of foreign exchange, each country gains more or less benefit dependent on their tie in to the dollar and their own supplies.
The rouble fell steeply and Russia, though budgeting at a price of $100 per barrel, is insisting through Rosneft and Gasprom that the nation can take an even lower price than currently in the market and still keep their projects economically viable. Reuters cited the International Energy Agency in a reports this week saying, ‘"For those whose currency is not pegged to the U.S. dollar, recent price drops have been partly offset by swings in foreign exchange rates: thus Russia's nominal export revenues in roubles inched up lately even as they plunged in dollar terms."
The IMF has halved its Russian 2015 GDP forecast, citing the downside risks of international tensions from the Ukrainian crisis.
Also reported by Reuters, is the deal that sees India pay Iran $US500 million as the ‘second instalment in an interim deal that allows Tehran to recover part of overseas frozen oil revenues that are payments for oil it has sold.” The full payment of $900 million will then be cleared. However Iranian refiners owe a total of $6 billion to Iran, money which is being used in a deal of back-to-back transactions as India deposits rupees into Indian banks and Iran uses the funds to pay for Indian imports. There has been a 38 percent increase in oil imported from Iran to India from last year (Reuters source).
Saudi Arabia/ UAE
Pegged to the US dollar, Gulf OPEC members are suffering falls in local currencies brought about by low oil prices. Saudi Arabia, however, with their large stocks of oil, is in a better position that other OPEC members to withstand the low oil prices. OPEC members have price levels needed to balance their budgets, but with UAE nations happy to take the cut, other OPEC members are suffering.
OPEC members price levels per barrel:
United Arab Emirates ($80/barrel)
Saudi Arabia ($99/barrel)