According to the Institute of International Finance, oil exporting countries will have large surpluses in 2021 and 2022 as higher crude prices generate more revenue for many producers.

“Net hydrocarbon exports and hydrocarbon government revenues account for more than half of total exports and total government revenues in major oil exporters,” according to a report from the institute.

“As a result, most oil exporters’ fiscal deficits in 2020 will be replaced by large surpluses in 2021 and 2022, with the exception of Nigeria, Kazakhstan, and Algeria.”

However, declining crude output in Nigeria, Africa’s largest producer, will partially offset any gains from higher oil prices due to diminishing volume.

Fitch Ratings stated on Wednesday that higher oil prices, reform momentum, and the gradual return of global trade and tourism are “brightening the economic prospects for much of the region, supported by Covid-19 vaccination and easing restrictions.”

“The GCC’s fiscal deficits will be significantly reduced in 2021,” the ratings agency predicted. Fitch forecasts average Brent crude oil prices of $63 per barrel in 2021, with further Opec+ production cuts unwinding.

According to the IIF, as a result of the surge in oil windfall due to the crude price surge, the breakeven price of oil for exporting countries will continue to fall, falling below $70 per barrel for the UAE, Saudi Arabia, Qatar, Oman, and Angola.

According to Fitch, the fiscal break-even oil price ranges from $55 to $90 per barrel, depending on the country.

“Our calculations show that Russia’s fiscal breakeven oil price in 2022, $44 per barrel, will be the lowest among oil exporters, supported by the expected volume recovery in oil and natural gas exports,” the IIF stated in its report.

Oil prices have risen to multi-year highs this year, fueled by a broader global economic recovery that has increased demand for crude.

Prices are also rising due to underinvestment in the sector, which has resulted in tighter crude supply as well as rising demand and a faster-than-expected recovery from the Covid-19 pandemic in developed markets.

While oil exporters will regain some of the ground lost due to the sector’s decimation due to low energy prices last year, oil importing countries will be hit the hardest by the commodities rally.

“Higher energy prices will harm several emerging and frontier market economies that remain heavily reliant on crude oil and natural gas imports,” according to the IIF.

“The terms of trade loss is especially significant for countries with hydrocarbon imports that exceed 4% of GDP, such as Thailand, Turkey, Chile, Jordan, Morocco, and Lebanon.”

Large oil importers such as India have already urged Gulf oil producers to relieve consumer pressure by pumping more crude.

However, Opec+, the oil exporters’ group that is on track to return 2 million barrels per day to the market by the end of the year, has so far resisted calls to significantly increase output.

“The sharp rise in oil and natural gas prices has begun to weigh on external balances, raising vulnerabilities for these countries,” according to the IIF.

“Wider current account deficits in these countries may make meeting external financing requirements more difficult.”