Higher oil prices, an expected global economic rebound and growing oil demand are set to lower the fiscal breakeven price of major Middle East producers, according to the International Monetary Fund.
The fiscal breakeven price is defined as the oil price needed to balance the budgets of oil-exporting countries.
As oil prices declined and fields matured in several Middle East countries, raising production costs, the breakeven price for several producers increased.
However, with oil prices rising this year owing to better growth prospects for the world economy, breakeven prices for resource-based economies in the Middle East appear to be narrowing.
The IMF raised its global economic outlook to 6 per cent from and earlier 5.5 per cent forecast, as a result of quicker Covid-19 vaccination campaigns and fiscal and monetary support provided by governments and central banks.
For Saudi Arabia, the biggest oil exporter in the world and the Middle East, the breakeven price is set to decline by 15.6 per cent from a year ago to $65.70 a barrel in 2022, according to the fund.
Saudi Arabia’s fiscal breakeven price, which was $77.90 a barrel in 2020, is expected to decline marginally to $76.20 this year. The price has been steadily falling since 2018, when it was $88.60 a barrel.
The fiscal breakeven price of Iraq, Opec’s second-largest producer, has increased steadily since 2018, when it was $45.40 a barrel.
This is due to higher spending, particularly to maintain a bloated public sector over the past couple of years, and a fiscal crisis last year that exhausted the country's domestic borrowing capacity.
Last year, Baghdad had a fiscal breakeven of $63.70, which is expected to hit $71.30 this year before falling to $66.10 in 2022.
Iran, one of the most populous nations in West Asia, has been squeezed by US sanctions and hit hard by Covid-19, resulting in the worst death toll in the Middle East.
Higher fuel prices and the impact of the pandemic on the global economy have exacerbated its financial crisis.
Iran needed oil prices to average $304.30 a barrel to break even fiscally in 2020. Its numbers are expected improve relatively in 2021 to $242.80 a barrel. However, its breakeven price is expected to rise to $259.20 in 2022.
Libya, the second-biggest producer of crude in North Africa, is one of the lowest-cost producers in the region.
Known for its light, sweet grade of oil, the country faced severe setbacks in terms of exporting oil due to a blockade that lasted about a year.
This caused its fiscal breakeven price to rise by 336 per cent to $417.50 a barrel last year.
However, in one of the steepest declines among oil producers in the region, Libya's fiscal breakeven price is expected fall by about 88 per cent to $48.80 a barrel this year.
The price needed to balance its budget will decline further to $46.70 in 2022, which will be the region's lowest after Qatar, which is largely a gas producer.
Libya’s reversal of fortunes follows the end of the blockade, which allowed it to substantially increase its export volumes.
Its production rose to 1.19 million barrels per day in March, about 10 times higher than the 121,000 bpd it produced in the third quarter of last year, according to secondary Opec sources.
The UAE, Opec’s third-largest producer, is expected to have a fiscal breakeven price of $60.40 in 2022, down from $68.20 in 2020 and $64.60 this year.
Bahrain, which traditionally has had one of the highest fiscal breakeven prices among Gulf countries due to its early decline in reserves, will have a breakeven price of $88.20 this year and $85.80 in 2022, compared with $100.40 in 2020.
Oman’s fiscal breakeven price will reach $61.80 a barrel in 2022, while Kuwait will need a price of $64.50 to balance its budget.
Top 10 most polluted cities
- Bhiwadi, India
- Ghaziabad, India
- Hotan, China
- Delhi, India
- Jaunpur, India
- Faisalabad, Pakistan
- Noida, India
- Bahawalpur, Pakistan
- Peshawar, Pakistan
- Bagpat, India
Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
UAE%20SQUAD
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The years Ramadan fell in May
Brief scores:
Huesca 0
Real Madrid 1
Bale 8'
SPECS
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Essentials
The flights
Etihad (etihad.ae) and flydubai (flydubai.com) fly direct to Baku three times a week from Dh1,250 return, including taxes.
The stay
A seven-night “Fundamental Detox” programme at the Chenot Palace (chenotpalace.com/en) costs from €3,000 (Dh13,197) per person, including taxes, accommodation, 3 medical consultations, 2 nutritional consultations, a detox diet, a body composition analysis, a bio-energetic check-up, four Chenot bio-energetic treatments, six Chenot energetic massages, six hydro-aromatherapy treatments, six phyto-mud treatments, six hydro-jet treatments and access to the gym, indoor pool, sauna and steam room. Additional tests and treatments cost extra.
Salah in numbers
€39 million: Liverpool agreed a fee, including add-ons, in the region of €39m (nearly Dh176m) to sign Salah from Roma last year. The exchange rate at the time meant that cost the Reds £34.3m - a bargain given his performances since.
13: The 25-year-old player was not a complete stranger to the Premier League when he arrived at Liverpool this summer. However, during his previous stint at Chelsea, he made just 13 Premier League appearances, seven of which were off the bench, and scored only twice.
57: It was in the 57th minute of his Liverpool bow when Salah opened his account for the Reds in the 3-3 draw with Watford back in August. The Egyptian prodded the ball over the line from close range after latching onto Roberto Firmino's attempted lob.
7: Salah's best scoring streak of the season occurred between an FA Cup tie against West Brom on January 27 and a Premier League win over Newcastle on March 3. He scored for seven games running in all competitions and struck twice against Tottenham.
3: This season Salah became the first player in Premier League history to win the player of the month award three times during a term. He was voted as the division's best player in November, February and March.
40: Salah joined Roger Hunt and Ian Rush as the only players in Liverpool's history to have scored 40 times in a single season when he headed home against Bournemouth at Anfield earlier this month.
30: The goal against Bournemouth ensured the Egyptian achieved another milestone in becoming the first African player to score 30 times across one Premier League campaign.
8: As well as his fine form in England, Salah has also scored eight times in the tournament phase of this season's Champions League. Only Real Madrid's Cristiano Ronaldo, with 15 to his credit, has found the net more often in the group stages and knockout rounds of Europe's premier club competition.
The specs
Engine: 3.0-litre 6-cyl turbo
Power: 374hp at 5,500-6,500rpm
Torque: 500Nm from 1,900-5,000rpm
Transmission: 8-speed auto
Fuel consumption: 8.5L/100km
Price: from Dh285,000
On sale: from January 2022
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Batti Gul Meter Chalu
Producers: KRTI Productions, T-Series
Director: Sree Narayan Singh
Cast: Shahid Kapoor, Shraddha Kapoor, Divyenndu Sharma, Yami Gautam
Rating: 2/5
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