WASHINGTON, Dec 14: A drop in world oil demand and prices mean OPEC’s oil revenues will plunge 19 per cent this year and fall another 14 per cent next year, the US government said on Friday.

The new forecast from the Energy Information Administration estimates Opec will collect $197 billion this year from oil exports, down 10 per cent from the agency’s earlier estimate. Opec’s oil revenues will fall again next year to $169 billion, the EIA said.

Last year, the cartel’s members rang up $241 billion in oil sales to the world.

The drop in revenue is expected to throw Opec members’ budgets into chaos, as oil export earnings account for a large part of their government revenues.

“The current and forecast decline in Opec oil revenues is once again increasing pressures to make difficult political choices, like cutting popular state subsidies for food and fuel,” said the Energy Department’s analytical arm.

World oil prices have dropped by roughly one-third since the Sept 11 attacks on the World Trade Center and the Pentagon. A slowing global economy has also reduced demand for petroleum.

Opec is struggling to reach an agreement with major non-Opec oil exporting nations to cut world oil production by 2 million barrels per day beginning Jan 1.

Several Opec members have already announced tight budgets, based on the drop in oil prices.

Earlier this month, Saudi Arabia approved a 2002 budget of about $53.9 billion, with a $12 billion deficit. The kingdom’s spending plan for next year bans the creation of permanent state jobs and pay increases.

Saudi Arabia had expected a balanced budget in 2001, but recently warned that it would slip into the red because of the global economic downturn.

Saudi Arabia is believed to be basing its 2002 budget on a forecast price of about $17 a barrel versus a 2001 average of about $21.50 per barrel, according to industry analysts.

Nigeria earlier this month said it will be unable to meet its 2002 debt service commitments to world creditors because of falling oil prices. Nigeria was scheduled to pay $3.4 billion in debt service next year, most of it owed to Paris Club members.

The EIA said Saudi Arabia, the cartel’s biggest oil exporter, would see crude revenues decline 15 per cent in 2002 to an estimated $49.6 billion.

Iran, OPEC’s second-largest producer, would see oil revenues slip 20 per cent next year to $16.4 billion, the agency said.

Iraq is the only Opec member likely to collect more oil money next year, with revenues rising 7 per cent to $15.9 billion, the EIA said. Iraq’s oil sector is not subject to Opec quotas and instead is overseen by a United Nations programme that allows the country to use oil revenue to buy primarily food, medicine and other humanitarian goods.

As for non-Opec countries that are major oil producers, Russia’s crude oil export revenues are expected to decline by about 6 per cent next year to $42.3 billion, the EIA said. Mexico’s oil revenues should fall 5 per cent to $10.8 billion.—Reuters