Oil Revenues Plummet

Remember last year, when everyone was complaining about high oil prices? Remember how McCain mocked Obama for suggesting that people keep their tires inflated? That was fun, right? Then gas prices dropped like a stone in pudding (quickly, but not too quickly- believe me, this is a perfect metaphor), and everyone kind of forgot about it.

Well, not everyone. This only confirms what everyone already knew, but a quick look at 1st-quarter revenue shows in stark relief just how much less money Yemen has to work with these days. (free subscription needed for link, but I’ll copy the good parts).

Yemen earned 75 per cent less from crude oil exports in the first quarter of 2009 than during the same period a year before, as falling prices and production levels hit the country’s main source of income.
The government’s share of crude oil exports totalled 5.9 million barrels between January and March, bringing in $254.8m at an average price of $43.10 a barrel, according to the Central Bank of Yemen (CBY). Domestic consumption totaled 6.19 million barrels.

During the same period of 2008, Sanaa earned $998.8m from 10.4 million barrels of exports at an average price of $96.3 a barrel, while domestic consumption reached 6.55 million barrels a day.

That is: a lot of money. Not only are prices lower, but production is decreased as well. Yemen is taking steps to reverse this, and is trying to diversify its economy with the Yemeni Liquifed Natural Gas lines (Yemen has high proven reserves). The problem is, of course, that revenue is what the country needs to keep greased the wheels of state, and this diversification is coming slowly, while the wheels are quickly coming off the rest of the country. We knew the economy was bad, but I didn’t think it would be a 75% drop. That is a terrifying number.