Breakeven crude oil prices are one metric of the economic constraints facing OPEC+ members (6/17/2020)

On June 6, 2020, members of the Organization of the Petroleum Exporting Countries (OPEC) agreed, along with 10 other partner countries (OPEC+), to extend their pre-existing 9.7 million barrel per day (b/d) production cut through at least July 2020. For many OPEC+ countries, the nearly 50% decline in crude oil prices during the past six months is likely to exert significant pressure on their economies and financial reserves. The extent of this pressure can be assessed by analyzing breakeven oil prices. While breakeven prices for a company generally refer to the minimum oil price required for a well to be profitable, breakeven prices for a country measure the oil price that a government (in the case of a fiscal breakeven) or an economy (in the case of an external breakeven) needs to cover its expenses. ... More »