Introduction
Today’s column furthers the discussion of the fiscal break-even price for crude oil. As previously indicated, this is a normative price, which is dependent on what governments figure that price ought to be, if they are to obtain the level of revenue that they need from oil to meet their expected spending requirements, while maintaining a balanced budget.
Because of this expectation, one would further expect that, as a rule, the fiscal break-even price for crude oil would tend to be higher than the break-even price generated by commercial market factors.
Table 1 provides recent estimates of fiscal break-even prices for a sample of thirteen of the top 20 crude oil producers/exporters. The data reveal there is a wide national variation in these prices. Thus, the range is from US$51.80 (Kuwait) to as much as US$207.60 (Libya) per barrel.
