The biggest regional winner will be the GCC, whose member states' economies are all heavily dependent on hydrocarbon exports. The single country that stands to benefit most is Iraq - crude exports account for about 95 per cent of its foreign revenues.
If Brent, the European benchmark crude that touched a 28-month high of US$101.08 (Dh371.26) per barrel on Monday, stays above $100 for long, then the GCC's four Opec members, Saudi Arabia, Kuwait, the UAE and Qatar, could reap extra revenues not only from the higher-than-forecast prices but from larger export volumes.
Opec would increase output if the turmoil in Egypt, which triggered Brent's two-day exploratory sortie beyond the $100 barrier, disrupts oil supplies from the region, Abdulla el Badri, the secretary general of the organisation, said yesterday. That could happen if Egyptian unrest deterred tanker traffic through the Suez Canal, which Egypt controls, or slowed the flow of crude through the country's Suez-Mediterranean pipeline, which provides an alternative route for transporting Gulf oil to the Mediterranean.
"Fears have gained momentum that any further escalation of the situation might result in disruptions of the global oil supply chain," JBC Energy, based in Vienna, said in a research note yesterday.
So far, however, there have been no such disruptions. JBC rated "any major logistical interruptions related to the political uncertainties" as "rather unlikely at the moment".
"Even if the worst-case scenario of a complete halt of traffic through the crucial link materialises, the global surplus in shipping capacity would allow a switch to the longer haul journey around southern Africa," the consultancy firm said. "However, there appears to be a substantial risk that events could spread to other countries in the region."
Global Investment House, the Kuwaiti investment bank, yesterday projected real GDP growth for the GCC of 5.9 per cent this year, up from an estimated 3 per cent increase last year, on the basis of IMF data. The report, prepared before protesters took to the streets in Egypt last week, was based on a "consensus forecast" of a 9.4 per cent rise in the average price for West Texas Intermediate (WTI) crude this year.
The US benchmark crude traded yesterday close to $92 per barrel, exhibiting an unusually strong discount to Brent that analysts attributed to nearly full storage at Cushing, Oklahoma, the pricing point for the New York Mercantile Exchange. That already puts WTI well ahead of this year's projected average, increasing the chance that the GDP forecast will be met or exceeded.
"Since the GCC is a predominantly oil-driven region, we expect hydrocarbon revenues to witness strong growth during 2011 due to high oil prices," Global Investment said.
The IMF last October estimated that a $10 per barrel increase in oil prices would have a substantial effect on the economy of Saudi Arabia, the biggest Opec oil exporter, boosting the kingdom's fiscal balance and current account balance, each expressed as a per cent of GDP, by about 6 and 7 percentage points respectively. The corresponding increases for the UAE would be about 4 percentage points for each metric.
Iraq, which is not bound by an Opec quota and is expected to export more crude this year under most scenarios, would experience a proportionately similar rise to that of Saudi Arabia in its current account balance and an even larger boost to it fiscal balance, meaning it could have more revenue available than expected to invest in reconstruction projects including energy infrastructure.
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Global Investment predicted 5.8 per cent regional GDP growth for the Levant and Iraq this year, up from 4.1 per cent last year, even taking into account a change of government in Lebanon.
The bank predicted that north Africa's economy would continue to grow this year, despite the recent change of government in Tunisia, after expanding by 3 per cent last year. "The oil sector of the region has performed soundly due to an increase in oil prices, after witnessing a slowdown in 2009," it said.
That prediction may now have been overtaken by events, as most economists expect Egypt's previously robust economic recovery to be derailed by the largest anti-government protests staged in decades in the most populous Arab state. The country's important tourist sector is expected to be especially hard hit, while foreign investors are expected to stay away.
Global Investment said the recent political unrest in Lebanon and Tunisia would have "a material impact" on economic growth and structural reform in the short term. In Tunisia, anti-government protests forced the country's president to flee last month.
"Other Mena countries are unlikely to see major negative economic effects, but markets may remain jittery," the bank said.
Many economists fear that high oil prices could hurt the global economic recovery, which would also harm oil producers, as fuel demand usually falls if GDP growth in energy-consuming countries drops sharply.