Oil & Energy
Saudi Gains 10% Revenue Edge, UAE Oil Income Falls 25% Amid Hormuz Crisis, Bloomberg Analysis Says
Saudi Arabia is capturing a price-driven oil windfall as Brent crude tops $126 per barrel, while Gulf peers lose up to $700 million per day from Hormuz disruptions, according to Bloomberg analysis on Friday.Saudi Arabia is redirecting most crude flows to the Red Sea, securing higher revenue despite shipment losses, while the United Arab Emirates is absorbing income declines due to limited rerouting capacity, the analysis said.Goldman Sachs estimates Saudi weekly oil revenue has climbed 10% above pre-war levels, while the UAE has seen income drop about 25%, the analysis added, citing Goldman Sachs analyst Farouk Soussa.The revenue gap is intensifying competition between the region's two largest economies, as the UAE exits OPEC and prepares to raise output once the Strait of Hormuz reopens, the analysis said.Since late February, Saudi Arabia has rerouted about 4 million barrels per day through its East-West pipeline to Yanbu, maintaining exports despite disruptions at the strategic chokepoint, according to the analysis.The UAE increased pipeline shipments to about 2 million b/d in March, but that volume equals only half of February exports, limiting its ability to offset losses, the analysis said.Oman has avoided export cuts due to ports outside Hormuz and has lifted oil revenue roughly 80% since the conflict began, while Kuwait, Qatar, Bahrain, and Iraq face steep income declines, the analysis added, citing Goldman Sachs.Equity markets reflect the divergence, as Saudi and Omani stocks outperform peers in the Gulf Cooperation Council, the analysis said.Goldman estimates the six GCC nations are losing about $700 million per day from disrupted flows, with cumulative losses projected to reach $80 billion after two months of closure, according to the analysis.Crude prices have surged since the Iran war disrupted transit through Hormuz, with Brent trading above $126 per barrel Thursday, marking the highest level since 2022, the analysis noted.Airstrikes across Gulf states have damaged infrastructure and weakened tourism, erasing the UAE's pre-war fiscal surplus of 6% of gross domestic product, while Saudi deficits improved only 1 percentage point, the analysis added, citing Goldman Sachs.Oman has shifted from a 7% fiscal deficit to an 8% surplus, while Bahrain is running a 17% deficit, Qatar a 20% deficit, and Kuwait a 40% deficit, Soussa said.JPMorgan estimates the GCC's fiscal position has deteriorated by about 3.6% of gross domestic product during the conflict, the analysis said.Saudi Aramco is expected to post about $32 billion in net income for the first quarter, its highest since Q3 2023, supported by higher prices and lower seasonal costs, analysts said, citing Citi analysts.Debt markets have seen Qatar and Kuwait raise billions through private bond sales, while Bahrain secured a $5.4 billion currency swap from the UAE, according to Bloomberg data.Goldman estimates weekly government borrowing needs across the GCC have doubled from $1.7 billion to $3.5 billion, pushing authorities to diversify funding sources during ongoing disruption, the analysis added.