The foreign reserves of the largest oil-exporting countries have fallen to the lowest in over a decade by the end of 2016. As of the end of 2016, the international reserves of the 13 largest energy-exporting countries, according to the estimates of the International Monetary Fund, were $ 967 billion - at least since 2006. At the peak in 2013, the figure was $ 1.26 trillion, writes the Financial Times. The reduction in reserves reflects the full extent of the problems facing the oil-producing states, including a reduction in their impact on the world arena and the need to diversify their economies in a short time-before liquidity runs out.
The largest losses were incurred by Venezuela - its foreign exchange reserves collapsed by 90% from the peak. In Libya, there was a 45% drop from the peak. In Algeria, the reserves decreased by 41% compared to the end of 2013, in Nigeria by 38%, in Russia by 35%, in Angola by 30%, in Qatar by 29%, and in Kazakhstan by 22%.
The Persian Gulf states, including Saudi Arabia, the UAE and Kuwait, used less foreign exchange reserves to deal with the consequences of low oil prices, since their budget deficits were smaller, and the reduction in revenues from the oil and gas industry was to some extent offset by investment income.
The decline may continue amid the renewed weakness of the oil market, said AFT.
"I expect that reserves will continue to fall at $ 45 per barrel," said Charles Robertson, chief economist at Renaissance Capital.
On Monday, the price of Brent crude for August delivery was below $ 46 per barrel, WTI was at $ 43.2 per barrel.
Amid low energy prices, the budget deficit in oil-exporting countries has grown significantly: in Brunei it fell to 21.9% of GDP, in Bahrain - to 17.7% of GDP, in Saudi Arabia - to 16.9% of GDP, and in Venezuela - to 14.6% of GDP.
Qatar, the United Arab Emirates, Saudi Arabia will have enough reserves for all the time necessary to diversify the economy, says the economist at Capital Economics for the Middle East Jason Touvy. He noted that the rate of reduction of reserves in these states has already begun to slow down. At the same time, he fears that Oman and Bahrain may soon need financial assistance from the more affluent neighbors.
About Algeria, the expert argues that it has only two or three years to diversify; otherwise the country will face severe adverse consequences.