There are reports in the Middle East that the U.S. is going, cap-in-hand, to Middle Eastern Gulf States, asking for $300 Billion to prevent the US economy from worsening. I’m skeptical as to whether or not this report is true – I mean, Americans are saving $365.25 Billion Dollars per year, now that gasoline and oil prices have come off-peak. However, with oil prices experiencing downward pressure, many of the Gulf nations may be more concerned with avoiding their own bankruptcies. An older article from Bloomberg reports:
Saudi Arabia needs oil prices of less than $30 a barrel to balance its government budget, according to Merrill Lynch & Co. estimates. The United Arab Emirates requires $40 a barrel and Qatar $55.
Iran, with double the population of Saudi Arabia, has a breakeven point of about $100 a barrel, according to Edward Morse, managing director and chief economist at Louis Capital Markets LP in New York. In Venezuela, where President Hugo Chavez’s government is spending oil revenue on social programs, the figure is about $120, he said.
If Iran has a $100/bbl break-even point, then the following price forecast is outrageously low:
The Iranian government will base its budget for the next calendar year on oil prices of over $37 a barrel, reveals an Iranian minister. LINK
Where else on earth have we seen other democratically-challenged governments low-balling their oil forecast figures in order to yield an eternal, magical surplus? Oh, right.
