Middle East set for $1.3tn oil windfall, says IMF

The IMF estimates that oil revenues in the energy-rich Middle East will increase by up to $1.3 trillion over the next four years. This windfall will strengthen the power of the region’s sovereign wealth funds at a time when asset prices around the world are falling.

The IMF’s estimates highlight how the Gulf region’s absolute monarchies are benefiting from high oil costs brought on by Russia’s war in Ukraine, while the majority of the rest of the world is struggling with skyrocketing inflation and worries about a coming recession.

According to Jihad Azour, the IMF’s head for the Middle East and North Africa, the region’s oil and gas exporters, mainly Gulf states, “will see additional cumulative oil revenues of $1.3tn through 2026” compared to expectations before the war in Ukraine, according to the Financial Times.

The Gulf is home to several of the largest and most active SWFs as well as some of the largest and most prolific oil and gas exporters in the world. These include the Public Investment Fund of Saudi Arabia, the Qatar Investment Authority, the Abu Dhabi Investment Authority, Mubadala, and ADQ, as well as the Kuwait Investment Authority.

According to market records, the $620 billion PIF, which is led by Saudi Crown Prince Mohammed bin Salman, invested more than $7.5 billion in US equities in the second quarter, including Amazon, PayPal, and BlackRock, in an effort to profit from declining stock prices.