Oil break-even: Nigeria worst, Kuwait is Best off in Fitch’s 2017 rating

*Fitch Ratings.

*Nigeria needs $139 oil, Kuwait $45 for 2017 fiscal balance
*Fitch forecasts oil averaging $52.50 a barrel this year


06 April 2017, Sweetcrude, New York —
Nigeria is worst off, needing an oil price of $139 a barrel to balance its budget, Fitch said in an April 5 report on 14 major oil-exporting nations in the Middle East, Africa, and emerging Europe. Even after cuts in government subsidies and currency devaluations, 11 of them won’t have balanced government budgets this year, including Saudi Arabi, according to Fitch Ratings Ltd.

Kuwait’s in the best position of major oil exporting nations in the Middle East, Africa and parts of Europe to have a balanced government budget this year with oil forecast to average $52.50 a barrel, the Rating agency disclosed.

“Fiscal reforms and exchange rate adjustments are generally supporting improved fiscal positions compared to 2015, but have not prevented erosion of sovereign creditworthiness,” Fitch said.

Only Kuwait, Qatar and the Republic of Congo have estimated break-evens that are below Fitch’s oil price forecast for this year. Kuwait at $45 a barrel traditionally has a low break-even because of its high per-capita hydrocarbon production and more recently its “large estimated investment income” from its sovereign wealth fund, Fitch said.

Brent crude, a global benchmark, has averaged about $55 a barrel this year.

The rating agency said it “substantially” raised the fiscal break-even prices for Nigeria, Angola and Gabon from 2015 levels because of rising government spending.

Fitch’s forecast 2017 break-even oil prices, per barrel:
– Nigeria at $139
– Bahrain at $84
– Angola at $82
– Oman at $75
– Saudi Arabia at $74
– Russia at $72
– Kazakhstan at $71
– Gabon at $66
– Azerbaijan at $66
– Iraq at $61
– Abu Dhabi, United Arab Emirates, at $60
– Republic of Congo at $52
– Qatar at $51
– Kuwait at $45


*Claudia Carpenter – Bloomberg

About the Author