The price of crude oil on the international market rose to the highest level on Monday since the beginning of last March, which constitutes an oxygen dose for the government that will earn about 10 dollars per barrel after reducing the reference price of oil from 50 to 30 dollars per barrel in the supplementary finance law, which would support the state treasury with an additional 8.2 million dollars a day, and 246 million dollars during June if prices remain at these levels.
The price of Brent North Sea crude (reference oil for the Algerian crude, Sahara Bland), reached $ 38.11 per barrel, within 2:00 PM, at the time of Algiers, on Monday, while the prices of West Texas US crude (WTI) reached $ 35.30 per barrel at the same time after they had opened the trading session at around $ 35.83 a barrel.
These price levels are the highest on record for nearly 3 months, and they are driven, according to observers, by signs of increased demand for oil in conjunction with the gradual opening of the economies of major countries after the closures that lasted for months.
According to the observers, this increase is also caused by the beginning of absorption of the global oil supply surplus due to the OPEC + reduction agreement, which was launched at the beginning of last May by 9.7 million barrels per day for two months (May and June).
This rise in crude oil prices coincides with the MPs ratification of the controversial supplementary budget law, which came in very special circumstances, characterized by a new austerity plan that reduces costs and increases in fuel prices (gasoline and diesel), and reducing the reference barrel price from $ 50 in the initial law for 2020 to $ 30 in the supplementary law.
According to these developments, the government will earn the equivalent of approximately $ 10 per barrel, given that the reference price in the Finance Law is $ 30, and the current marketing price of Algerian oil reaches $ 40 per barrel (exceeding the price of brant by 1.3 to 1.5 dollars).
In a simple calculation, the government will earn according to these new data for the oil market, $ 8.2 million per day, and $ 246 million per month, if crude prices remain only $ 10 higher than the reference price of oil in the supplementary finance law, which is $ 30 per barrel, given the volume of Algeria’s daily exports in June, which is estimated at 820 thousand barrels per day only, knowing that Algeria’s share of the reduction is estimated at 240 thousand barrels per day during May and June.