From a desire to develop the economy to the need to raise money

The per capita income of members of the Organization of Petroleum Exporting Countries (OPEC) is now half of what it was in 2008, and the prospects for immediate improvement is not good, according to the failure of the subscription of shares of Saudi Aramco.

Liam Denning said in a report on the site that anyone who marveled at the faltering of the IPO shares of Saudi Aramco, even with oil prices below $ 60 a barrel, should look for the reasons behind it, as follows:

Split the booty
Saudi Arabia's per capita oil export revenues jumped by almost a third last year, but still well below pre-crash levels, the writer said.

He pointed out that a $ 2 trillion valuation for Aramco - which was targeted by Crown Prince Mohammed bin Salman - was unrealistic when oil was trading at $ 70 a barrel, and seems to be less realistic now, with lower prices.

So unless new bankers at Aramco have a way of avoiding what could be a horrific oil market in 2020, the rationale for an IPO may have shifted in the kingdom from a high tone of economic renewal to an urgent need for funds.

Each OPEC member enjoyed an increase in per capita income last year ($ 1,400 per capita in real terms), the writer said. However, this increase is still less than half when compared to the situation in 2008 ($ 2,800 per capita) when oil prices peaked, and in 2011 ($ 2,700 per capita) when oil rose again because of the Arab Spring.

In other words, the group enjoyed the biggest surprise so far this century, when China was developing rapidly, before the wave of investment in the oil sector, including shale oil, due to fears of supply shortages due to tensions in the Middle East.

Collapse
Putting Iraq aside, the average per capita oil export revenue for OPEC countries in 2018 was about 40% to 80% below its peak this century.

This means that the average per capita export revenue in 2020 - which is only $ 1,065 in real terms - will be the lowest since 2003 ($ 925 per capita), apart from its lowest level in 2016 ($ 921), which is small. Despite three years of supply cuts by OPEC and new partners.

The writer concluded that the world of OPEC has changed to an unimaginable degree, and that many of the members of the Organization in a regret because of the lack of resources to face this situation.

Denning, who was an investment expert, concluded that the situation was the single biggest threat to the world oil market, and considered it a compelling reason to put aside previous expectations and simply raise funds.