| Summary: | Oil prices collapsed beginning in late 1997 from an average of 17 dollars per barrel (dated Brent used as a wide reference at the time) to a low of just above 10 dollars per barrel. This low level, which was reached as early as March/April 1998, held with some fluctuations, until early 1999. The fall was of the order of 40 percent. The impact on the export revenues of oil-exporting countries was severe. The base price of 17 dollars per barrel that has been characteristic of oil price movements since 1989 was not very rewarding. A 40 percent fall from this level involves a greater percentage fall from net unit revenues since that number, equal to price minus unit costs, is smaller than the per barrel price. To illustrate, assuming that average per unit cost was about 1.5 dollars per barrel at the time, per unit revenue at 17 dollars per barrel would have been 15.5 dollars per barrel. A 7 dollars per barrel price fall would have reduced revenue by 45 percent.
|
|---|