Oil-producing nations are bracing for financial turmoil as crude prices crash below $60/barrel—their lowest since early 2021—forcing governments to consider spending cuts, debt sales, and stalled projects to offset lost revenue. The slump, triggered by Trump’s tariffs and OPEC+ supply hikes, threatens to derail budgets from Riyadh to Caracas.
Crisis Points by Country:
| Nation | Breakeven Price | Response to Price Crash |
|---|---|---|
| Saudi Arabia | $90+ | May pause Neom megaprojects; leans on bond markets. |
| Russia | $69.70 | Faces industrial slowdown; pressure to cut rates despite inflation. |
| Iraq | $70 | Infrastructure rebuild at risk; may seek IMF aid. |
| Nigeria | Half of revenue | Likely to borrow more rather than slash spending. |
| Venezuela | N/A | Already in economic emergency; U.S. sanctions worsen pain. |
| Iran | $64.38 | Fears China may curb oil buys amid US “max pressure” campaign. |
Key Drivers of the Crash:
- Trade War Fallout: Trump’s tariffs sparked recession fears, crushing demand outlooks.
- OPEC+ Moves: Group plans to add 411K bpd in May, worsening oversupply.
- Debt Reliance: Kuwait, Saudi Arabia, and Nigeria turn to bond markets to fill gaps.
Quotes That Sum It Up:
- “$60 oil won’t balance budgets—it risks unrest.” — Richard Bronze, Energy Aspects
- “Brazil’s yellow light is flashing.” — Rio de Janeiro Governor Claudio Castro
- “Venezuela and Iran face a Trump double whammy.” — Jason Tuvey, Capital Economics
What’s Next?
- Saudi Austerity: Watch for delayed Vision 2030 projects if prices stay low.
- Emerging Market Stress: Nigeria, Iraq may need emergency loans.
- Geopolitical Risks: Iran/Venezuela could flout sanctions to boost exports.
Oil Nations Scramble as Price Plunge Threatens Budgets: Debt, Cuts, and Austerity Loom