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IMF warns $40/barrel level is critical for Azerbaijan

28 October 2008 09:53 (UTC +04:00)

IMF said under the existing circumstances, current account and fiscal surpluses in the oil-exporting countries would decline, although they would remain significantly positive in most countries.
The average break-even oil price for the fiscal accounts (i.e., the price at which a country would achieve a fiscal balance) is US$57 per barrel in 2008, demonstrating that most oil exporters can easily absorb lower world oil prices.
Exceptions include Iraq, which is expected to run a small fiscal deficit with the current oil price levels, and Iran, where the fiscal position may turn into a deficit if oil prices dip below US$90 per barrel.
According to the IMF staff estimates and projections, the critical level for Azerbaijan is US$40 per barrel.

Oil Exporters’ Break-Even Prices for 2008 Fiscal Account	In U.S. dollars/barrel
United Arab Emirates	23
Qatar	24
Kuwait	33
Azerbaijan	40
Libya	47
Saudi Arabia	49
Algeria	56
Kazakhstan	59
Bahrain	75
Oman	77
Iran	90
Iraq	111

Azerbaijanâ€™s state budget was built on revenue estimates of oil priced at US$70 a barrel for 2008. Given that oil prices have dropped to US$63 a barrel, Iraq, Iran, Oman and Bahrain have already felt remarkable loss.
The United Arab Emirates is the best positioned country because oil prices declining up to US$23 a barrel will still add profit to the state budget.