Tuesday, May 31, 2011

'Breakeven-buying-yourself-out-of-trouble' price of oil increasing significantly for GCC members!

"... The chances that the GCC's long-term socio-economic challenges of demographic growth and youth unemployment will be solved now look a good deal worse than just a few months ago. For the high-rent countries, the issue will remain largely academic for decades to come. But depending on oil price developments, it could become an existential worry for Bahrain, Oman and Saudi Arabia before the end of the decade. The breakeven oil prices for GCC budgets have increased significantly in the past few months. Bahrain probably already needs a per barrel price above $100, while the Institute of International Finance predicts a Saudi breakeven price of $110  for 2015. These should be sobering numbers for those who believe that the GCC can always buy its way out of trouble."

1 comment:

Anonymous said...

They can just reduce production to get the price they want. The real problem with GCC countries is gross mismanagement of resources and most of them even prefer western citizens over their own for filling jobs. Their education system is so terrible that, for a good future, one must be educated in one of their British or American schools. Those are the real long term problems.