According to a new report from Saudi Arabias National Commercial Bank (NCB), Gulf economies appear on track for historically high surpluses
The report says that the Institute of International Finance had estimated that the GCC countries can expect to reap record oil revenues of US$572bn this year compared with US$538bn last year.
The GCC countries have enjoyed an exceptional fiscal windfall since the oil price rebounded from its lows of late 2008 and early 2009, it said.
Apart from the benign price environment, the GCC producers have generally boosted their output levels, initially in response to production disruptions in Libya and subsequently also in connection with the tightening sanctions on Iran, according to the report.
It said the fiscal windfall has in turn made it easier for the GCC governments to continue with a generally permissive fiscal policy.
The continued tightness of the oil market represents a significant fiscal windfall for the GCC at a time when fiscal break-even prices have gone up fairly rapidly.
The NCB's GCC economic review also said marginal costs of production are going up almost everywhere because of smaller, more remote fields and lower grade oil which costs more to drill, move, and refine, and produces less energy for a unit of input.
It said 85 per cent of the oil sold globally now has higher sulphur content than either of the two main benchmarks.
