The Fujairah oil storage terminal. Capacity for storing crude oil and refined products is set to rise to 13.3 million cubic metres in 2015, from about 6.8 million cubic metres by the end of this year. Image Credit: Gulf News Archives

Dubai: If the forecasts by leading economists are to be believed, the Gulf countries are headed for a new economic boom, largely driven by the oil windfall.

HSBC has forecast that higher oil prices will bring record revenues to the region in 2012, adding an estimated $400 billion (Dh1.47 trillion) to the assets of its producers and lifting the region's gross domestic product to $2.7 trillion.

"Oil prices have risen 20 per cent [over the last quarter], a rise which will translate, for the region's oil producers, into an additional $400 million a day in revenues. We estimate total export receipts will come in at $750 billion in 2012, taking dollar GDP [gross domestic product] for the region as a whole to $2.5 trillion and adding over $400 billion to the oil producers' already substantial foreign assets," Simon Williams, chief economist, Middle East and North Africa of HSBC, wrote in a report.

Economists at Bank of America Merrill Lynch and Citibank also believe the GCC as bloc is a net beneficiary of the regional political turmoil and sustained surge in crude prices.

"We have revised our GCC regional GDP growth forecast to 4.3 per cent in 2012, from 3.4 per cent previously. While the revision is largely led by stronger macro projections for Saudi Arabia, the underlying drivers in general are the significantly improved outlook for the global economy and the higher oil prices," said Jean-Michel Saliba, Economist, Middle East and North Africa at BoA Merrill Lynch.

Analysts say higher oil prices are supportive of the GCC macro outlook through higher liquidity, stronger fiscal and current account balances, and higher GDP growth. "We have revised our 2012 forecasts for the UAE to 3.4 per cent from 2.4 per cent and for Saudi Arabia to 4.7 per cent from 2.9 per cent. Both countries are able to export more oil at higher prices," said Marios Maratheftis, an economist with Standard Chartered.

HSBC economists estimate, at $120 a barrel, the value of the region's oil output has risen by an additional $400 million a day.

"The world's oil consumers will have delivered almost $200 billion to Middle East oil exporters in the first quarter of the year alone — $30 billion more than they might have but for the recent price gain," said Elizabeth Martins, an economist with HSBC.

Last year, the Arab Spring clouded the region's prospects for international investors. In retrospect, at least for now, the regional unrest appears to be largely confined to the periphery with relatively low negative consequences for the Gulf economies.

On the contrary, economists now say the Gulf countries have benefited from the regional turmoil. "The very same political risks that have raised concerns over sovereign creditworthiness and economic outlooks have helped generate the greatest revenue windfall in the region's history," said Farouk Soussa, Citibank's chief economist for the Middle East.

Against the International Monetary Fund's 2010 forecast of oil price averaging $75 a barrel in 2011, it averaged $110 a barrel last year. The difference in revenues implies a windfall of $183 billion for the region's oil exporters.

"We estimate that in the GCC, home to just 10 per cent of the region's population but 77 per cent of the oil exports, dollar GDP will exceed $1.5 trillion," said HSBC's Williams.