Crude oil has wiped out more than a third of its value this week after the collapse of the OPEC+ alliance, and cartel members are losing revenue of more than half a billion dollars per day.

For most OPEC countries, oil is a major source of revenue and such a sharp fall in prices will put their economies under pressure, some of which, like Iran and Venezuela, are already on the brink of the abyss.

Brent futures fell by 31% to 31.02 USD per barrel on Monday, reaching their lowest level since mid-February 2016. Prices dropped nearly 20 USD per barrel from their peak before the OPEC meeting and its allies on March 6.

This means that overall and based on the average yield in February, OPEC member countries lost revenue of more than 500 million USD, according to the estimates.

OPEC has demanded that the existing cuts be increased by another 1.5 million barrels per day to over 3 million barrels per day by the end of the year. However, Russia rejected the proposal, causing the union to collapse and the start of a price war for market share.

Yesterday, Nigeria and Algeria, which are part of OPEC, said the collapse of the deal would be painful for the producing countries.

“A 10 USD drop in oil prices reduces fiscal revenue by 2% to 4% of GDP depending on the country, and oil prices that would lead to zero fiscal revenue are far above the current levels for all cooperating countries in the Persian Gulf”, said Jan Friedrich, Head of Middle Eastern and African Sovereign Ratings at Fitch. “But at least higher-ranking countries, especially Kuwait, Qatar, and Abu Dhabi, have broad buffers, mainly in the form of sovereign wealth funds”, added he.