Skip to main content

It might come as no surprise to hear that the soaring price of crude oil is taking money away from oil consumers and putting it into the hands of the world's oil exporters. But the numbers, crunched by Stephen Jen at Morgan Stanley, might provide some very interesting facts.

According to Mr. Jen, Saudi Arabia is making about $1-billion a day in oil exports. Even more impressive, the six members of the Gulf Cooperation Council (which includes Saudi Arabia) have $58-trillion (U.S.) worth of proven oil reserves with oil at $120 a barrel - a little more than the total equity market capitalization for the entire world. Of course, with oil at about $135 a barrel, those oil reserves are closer to $65-trillion, or about 30 per cent more than the world's equity market cap.

Crude oil traded close to $140 a barrel at the start of the day on Monday, but fell sharply after Saudi Arabia confirmed that it will increase production by 200,000 barrels a day: oil fell by about $6 a barrel from the peak, trading in the afternoon at under $134. Either Saudi Arabia doesn't know what to do with all the money, or the country is growing concerned that so-called demand destruction - where consumers park their cars and turn off their air conditioners - is at hand.

Story continues below advertisement

Report an error
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Please note that our commenting partner Civil Comments is closing down. As such we will be implementing a new commenting partner in the coming weeks. As of December 20th, 2017 we will be shutting down commenting on all article pages across our site while we do the maintenance and updates. We understand that commenting is important to our audience and hope to have a technical solution in place January 2018.

Discussion loading… ✨