The historic crash in oil prices in the wake of the coronavirus pandemic is reverberating across the Middle East as crude-dependent countries scramble to offset losses from a key source of state revenue.
will likely have to delay mega-projects. Egypt and Lebanon face a blow as their workers in the Gulf send back less of the much-needed dollars that help keep their fragile economies afloat.pandemic is reverberating across the Middle East as crude-dependent countries scramble to offset losses from a key source of state revenue — and all this at a time when several of them already face explosive social unrest.
“Coming into summer the conditions are developing for a perfect storm for the government,” said Sajad Jiyad, an Iraq-based analyst. In its draft 2020 budget, Iraq had been counting on revenues from oil prices at $56 a barrel to fund badly needed development projects and the bloated public sector, costing nearly $45 billion in compensation and pensions. Oil Minister Thamir Ghadhban said recently that revenue from crude exports has dropped by 50%.
On top of this, expected compliance with OPEC will require Iraq to cut over 1 million barrels per day from production in May and June. Target dates of Crown Prince Mohammed bin Salman’s plan for the completion of new cities and mega projects will likely be delayed as businesses suffer and foreign investment dips amid the pandemic.
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