Oil Price Required for Countries to Have a Balanced Budget, 2020

The global economy shutdown has severely impacted OPEC and mineral oil-producing nations.  Even a revised estimate of 400,000 barrels per day less, is too much.  The problem is that many OPEC countries are in bad financial shape, and over-reliant on elevated oil prices to support their inefficiency and corruption.  It would be difficult to revise it further down without political and social consequences.  They cannot simply stop the pumps, and throw more people out of work when there is virtually no safety net.  So they run at a huge loss, which will impact the balance sheet for years to come, and would like cause a cascading default of petrobonds. 

In 2021, oil was trading between US$30 to $40 per barrel on average, when oil producing nations need it to be above US$60 per barrel just to balance their budgets.  We have not averted the danger of a cascading default of petro-economy sovereign debt.  Some countries such as Malaysia and Bolivia even assumed oil prices well in excess of US$60 per barrel.  They borrowed on those assumptions, and they are in no position to service debt due. 

The following graphic does not include South America.