Breakeven Oil Prices, Fiscal Deficits and Shifts in Foreign Policy – Crisis induced change in oil producing countries
Thursday the 15th of April
Speaker: Bashir Bernard Siman OBE
Breakeven Fiscal Oil Prices (BFOP) are the minimum price required to balance the budgets of oil producing countries. The twin shocks of sustained low oil prices and the fall in demand due to the Covid-19 pandemic came on the heels of the already existing over- supply of oil on the global markets. When market oil prices fall below BFOPs, oil producing countries develop deficits. The current deficits cannot be remedied through traditional reductions in production and expenditure by OPEX+ countries. Almost all of the oil producing countries, from the Gulf states to Russia and African and Latin American producers are facing this dilemma. They have had to fundamentally change their fiscal models, with attendant shifts in foreign policy, as well as their geopolitical consequences.
This webinar will explore those shifts. It will recommend that specialist and expert input into the process of diplomatic engagement and foreign policy making is now essential to produce bespoke approaches to each country or cluster, rather than a one-size fits all approach. Analyses and briefings undertaken round the impact of fiscal deficits on the domestic stability of these countries or on macro-economic trends, or a combination of both, will no longer suffice. New fiscal models have the potential to fundamentally alter foreign policy choices. One way to deal with deficits is to borrow, and debt diplomacy is an emerging main theme.
The webinar will explore the dynamics and mechanics of how prices and deficits interact with foreign policy and the likely outcomes based on the different categories of geopolitical volatility, including the role of Sovereign Wealth Funds, sanctions and the peg to the US$.
The webinar is open to all but is likely to be of particular interest to diplomats, treasury officials, officials and interlocutors of multilateral organisations, public officials with an interest in dealing with oil producing countries, debt politics, development aid, as well as those interested in geopolitics.
This event will be recorded.
There is no need to register.