OPEC to Earn More than $1 trillion in 2012

Last Updated: 2, January 2013

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The Organisation of Petroleum Exporting Countries, or OPEC, is expected to reap a record of more than $1 trillion in net oil revenues in 2012 as the annual average price of Brent crude closed at an all time high, rising 3.5 percent for the year.

Brent crude, the international oil benchmark, rose on Monday closing the year 2012 up for the fourth consecutive year.

Shrugging off concerns over the US budget negotiations and geopolitical threats to production, Brent closed the year averaging $111.68 per barrel, higher than the previous all-time high set in 2011 of $110.9, gaining 3.5 percent for the year.

As a result, the OPEC oil cartel, led by Saudi Arabia, will stand to pocket more than $1 trillion in net oil revenues in 2012, reported the Financial Times.

The record run of triple-digit oil prices, coupled with strong production in the first half of the year, lifted OPEC’s net oil revenues to a peak of $1.05 trillion in nominal terms, up 2.5 percent from 2011, US government data showed.

[quote] In real terms, OPEC’s 2012 revenues were also the highest ever, surpassing the peaks set during the oil crises of 1973-74 and 1978-81. [/quote]

A decade ago, OPEC countries made just under $200 billion in oil revenues.

However, the windfall will be unevenly distributed among the members of the cartel, which jointly control over 40 percent of the global market.

In particular, Iran will take home a smaller portion of the proceeds as US and European sanctions crippled its oil export economy, pushing down its production to a 32-year low. Between January and November, Iran earned only 6.5 percent of OPEC’s total net revenues, down from its 10 percent share during most of the 2000s, said the Financial Times.

The shortage of Iranian oil instead helped Saudi Arabia, Iraq, Kuwait and the UAE to pump more oil, profiting from the record annual prices.

Saudi Finance Minister Ibrahim Alassaf said on Saturday the kingdom ran a budget surplus of 387 billion riyals ($103.2 billion) in 2012 as high energy prices and strong output levels generated revenue of 1.24 trillion riyals.

“The results of this year are exceptional,” Alassaf told Al-Arabiya television, but added, “The international conditions and the increase in production by some states (in 2013) will have negative effects on prices.”

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