Kazakhstan can survive the current oil crisis with minimal losses
The historic oil price drop won’t have a serious impact on the economy of Kazakhstan, which cannot be said about other oil-producing countries. According to the FinReview.info informational and analytical media, global oil demand has dropped by almost 20 million barrels per day and its cost by 70 percent since the beginning of 2020. However, despite the decline in global demand, Kazakhstan increased oil production by 2.4 percent within the first quarter of this year. The volume of the country’s production amounted to 23.6 million tons, and in monetary terms – 2.6 trillion Tenge (US$5.9 billion). Kazakhstan also managed to increase the volume of oil transportation by 5 percent. 16.9 million tons of oil were exported through the Caspian Pipeline Consortium, which is the largest international channel.
However, the new OPEC+ agreement takes effect on May 1, within the framework of which Kazakhstan will reduce oil production by 390,000 barrels per day. Experts say that even in the case of a long-term preservation of the oil cost at nearly US$20 a barrel, Kazakhstan will be able to maintain the national economy for 15 years due to the accumulated international reserves. It suggests that Kazakhstan has a great potential to survive the current crisis with the minimal losses.
Kazakhstan has significant hydrocarbon resources. Currently, the total volume of oil reserves is about 30 billion barrels, or 1.7 percent of world reserves, making Kazakhstan 12th in the world after countries of the Middle East and Latin America, as well as Russia and the United States. Oil production brought for the country’s exchequer more than 1 trillion Tenge (US$2.2 billion) within the last two years. However, if the current low oil prices remain, the country’s revenues may decreased by three times.