Oil Gulf States face both advantages and problems as

Dubai, the United Arab Emirates – The rich states of the Arab Gulf are in better position than many other regions of the world to manage the economic impact of prices, economists and regional investors by US President Donald Trump. But a trembling perspective for the price of oil could endanger the budgets of certain countries and spending projects.

Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Oman and Qatar constitute the Gulf Cooperation Council. Together, they represent approximately 3.2 billions of dollars of sovereign financial assets, representing 33% of the total of sovereign assets in the world, according to the secretary general of the GCC, Jasem Mohamed Albudaiwi.

The CCG also holds approximately 32.6% of the proven crude oil reserves in the world, according to the Statistical Center of the Cooperation Council for the Arab States of the Gulf.

This makes it both an asset for the Trump administration as well as vulnerable to its policies, while Trump has long pushed OPEC, the oil producing alliance led by Saudi Arabia, to pump more oil to help reduce oil prices and compensate for inflation in the United States

A drop in the price of oil, however, can have a significant impact on budgetary deficits and spending plans for these countries, whose savings – despite diversification efforts – always depend on hydrocarbon income.

Ben Powell, Chief Investment Stratege of Blackrock for Asia-Pacific and the Middle East, based in Abu Dhabi, said that warm relations in the region with Trump strengthen his hand with regard to potential price negotiations. Some CCG countries have also widened their role in world diplomacy. An example is Riyadh's accommodation of peace talks to end the Russian-Ukraine war, Which made him more and more important for Washington.

“I think the Middle East, with the deep relationship with the United States, should go out,” Powell told CNBC “Access to the Middle East“Monday.

“I think we are all going to be swept away in the maelstrom during the next short period. It is inevitable. But the Middle East, with the balance of the balance sheet they have, with the energy support they still have, by providing funding on an almost continuous basis … For me, the Middle East-perhaps not today, but over time-should be a relative Winner in this mixture” when it comes to emerging the brands, Powell.

Considering what the first-hand impact of the prices could be, Monica Malik, chief economist of the commercial bank of Abu Dhabi, noted that the United States is not a major export market for the Gulf.

“The CCG should be in a relatively favorable position to resist the opposite winds, in particular water,” she wrote in a report for the bank on Friday.

Although the region is confronted with universal tariff coverage at 10% as well as prices previously imposed on all foreign steel and aluminum products-that the United and Bahrain Arab Emirates export both-“We expect the direct impact to be relatively contained, because the United States is not a key destination for Gulf exports,” C.3.7% of total GCC exports in 2024, “she said.

But oil prices are essential for budgets from the Gulf States and future spending plans – in particular for Saudi Arabia, which has embarked on billions of dollars in ambitious mega -projects in the framework of the 2030 vision, the Crown Prince Moihammed Bin Salman of the Balayage Initiative to diversify the kingdom’s economy. The success of the plan, perhaps ironically, is strongly based on petroleum income.

World benchmark Bully was negotiated at $ 61.44 per barrel on Wednesday at 8:30 am in London, down almost 17% from the start of the year. Additional pressure was exerted on the price after OPEC +, the oil producing alliance led by Saudi Arabia and Russia, made a Surprise decision to accelerate the planned gross production increases, Meeting the global offer more.

Saudi Arabia needs oil at more than $ 90 a barrel to balance its budget, estimates the international monetary fund. Goldman Sachs has reduced its oil price forecasts this week for $ 58 for Brent and $ 55 for the American reference crude. This is a significant decision below its forecasts last Friday of $ 62 for Brent and $ 59 for WTI in 2026.

“A lower global demand and a greater supply adds risks to our Brent forecasts for 2025, although we expected more market clarity before making changes,” Malik from ADCB told CNBC on Monday. OPEC + is supposed to increase oil production levels again in May, and it predicts that the group will interrupt this plan if crude prices remain where they are or fall further.

“Our greatest concern would be a drop in the price of net and sustained oil, which would require a reassessment of spending plans – the government and the budget deactivated – including the CAPEX, while potentially affecting the liquidity of the banking sector and greater confidence,” warned Malik.