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The Energy Information Administration (EIA) projects net export revenues for the Organization of Petroleum Exporting Countries (OPEC) to fall by roughly 50% on a year-over-year basis in 2015, according to a report issued on March 31, 2015. The study excludes Iran due to its sanctions, but the remaining OPEC members are projected to bring in $380 billion in 2015 from oil exports, as opposed to the $730 billion the group realized in 2014.

The totals from the most recent year were impacted by the oil price slide, considering it is 11% lower than 2013’s total of $824 billion.

Income on a per-capita basis is consistent with the 50% revenue drop, as earnings are projected to fall to $1,114 from $2,186. Even though OPEC exports to the United States have fallen every year since 2010 (and are currently the lowest since 1987), the EIA says the sharp downturn in export revenue is largely related to the average annual price decline rather than OPEC’s dwindling market share in the United States.

2016 revenues are expected to rebound to $515 billion, which is 36% higher than 2015 projections but still nearly 30% below totals from 2014. OPEC members are projected to make $659 billion (42%) less in the next two years compared to the previous two years of 2013 and 2014.

Saudi Arabia’s decision to maintain output has placed immense pressure on other members of the cartel. The Saudis account for about 33% of all OPEC production and are projected to lose about $220 billion if the two-year comparison metrics above are applied. However, the country holds $735 billion in official reserve assets and appears to be in a solid position to weather the commodity storm.

The same can’t be said for smaller, more marginal members like Angola and Venezuela, which rely on export revenues for 97% and 95% of their respective economies. War-torn Libya has earned just $9 billion in export revenue since January 2014 and is rumored to be on the verge of bankruptcy. 

“OPEC has outlived its usefulness” – Hofmeister

In the upcoming Part II of his interview for Oil & Gas 360®’s TOP MINDS IN THE BUSINESS, former Shell Oil President John Hofmeister tells Oil & Gas 360® that “OPEC has outlived its usefulness.” In the interview Mr. Hofmeister discusses Saudi Aramco’s power to influence world oil markets and the waning influence of the overall cartel.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.