August 30, 2008

Gulf to earn USD 6 trillion from oil by 2022

According to a report BY McKinsey Global Institute, 6 Middle East oil exporters stand to earn more than USD 6 trillion by 2022. With oil at USD 70 a barrel, the 6 Gulf Cooperation Council countries would reap export revenues of USD 6.2 trillion over the next 14 years, triple the amount earned during the previous 14 years.

At USD 100 a barrel, earnings would approach USD 9 trillion, while even a pullback in crude prices to USD 50 would bring in a cumulative USD 4.7 trillion.

The report said that investment choices of the 6 countries namely Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Oman and Bahrain will affect interest rates, liquidity and financial markets around the world. It added that "The new fortune also comes with risks. A flood of liquidity into global markets could cause asset price bubbles, fuel profligate lending and result in a poor use of global capital."

McKinsey estimated that the 6 states will have USD 3.5 trillion to invest abroad between now and 2020, nearly twice their current foreign wealth. 6 GCC countries held foreign assets worth about USD 1.9 trillion at the end of 2006.