Bountiful Barrels: Where to Find $140 Trillion
THE NEAR-DOUBLING in oil prices in the past year to $144 a barrel is leading to a huge transfer of wealth to petroleum-producing countries -- and that has implications for global interest rates, currencies and stock markets around the world.
The revenues of oil-exporting countries now are running at about $7 billion a day, or $2.5 trillion annually, according to Stephen Jen, chief currency economist at Morgan Stanley. Even more impressive is the value of the oil reserves of petroleum-exporting countries, which now total an estimated $140 trillion, nearly three times the size of global equity markets, which have a combined market value of around $50 trillion.
Annual global economic output runs at $60 trillion. In a recent report titled A Monumental Petro-Wealth Transfer, Jen calculated the value of the oil reserves of three groups of exporting countries. He values those of Saudi Arabia and five other key oil producers in the Persian Gulf region at about $65 trillion, based on $135 oil....MORE