Bahrain's Oil: How Long Will It Last?

Bahrain's economy is heavily dependent on oil and gas, with petroleum being the country's most exported product. Oil and gas comprise 85% of Bahraini budget revenues, and petroleum accounts for 60% of export receipts, 70% of government revenues, and 11% of GDP. Bahrain's oil reserves are expected to last 10 to 15 years, and the country has been working to diversify its economy away from its limited oil supplies. Bahrain's gas reserves are expected to last about 50 years at present consumption rates.

Bahrain's oil reserves

Bahrain's oil and gas sector remains a strong component of its economy. As a small non-OPEC Gulf oil producer, Bahrain has approximately 124.6 million barrels of proven oil reserves, ranking 67th in the world. This accounts for about 0.0% of the world's total oil reserves. Bahrain's oil revenues come from two fields: the onshore Bahrain field and the offshore Abu Safah field, which it shares with Saudi Arabia.

In April 2018, the Bahraini government announced its biggest oil discovery since the 1930s. An extensive reservoir was found off Bahrain’s west coast, estimated to contain about 80 billion barrels of tight oil in place. The country also announced the discovery of 10-20 trillion cubic feet in onshore “Pre-Unayzah” deep gas reserves beneath the legacy Bahrain field. These discoveries are currently being evaluated, with technical work being carried out to understand production costs.

Bahrain's oil production has been stabilised at about 40,000 barrels per day, and reserves are expected to last 10 to 15 years. The country's petroleum exports account for 60% of export receipts, 70% of government revenues, and 11% of GDP. Bahrain's success in economic diversification has reduced its dependence on oil revenues, with the non-oil sector showing robust growth. However, oil still plays a dominant role in the country's economy, and efforts to further diversify are ongoing.

Oil as % of Bahrain's exports

Oil is a significant component of Bahrain's exports, with petroleum being the country's most exported product. In 2018, Bahrain's exports of crude oil reached an all-time high of 156,500 barrels per day. While the exact percentage of oil exports in relation to total exports is unclear, it is evident that oil plays a crucial role in Bahrain's economy.

According to various sources, oil comprises a substantial percentage of Bahrain's government revenues. One source indicates that oil revenues account for over 70% of government income since 2007. Another source mentions that oil accounts for 70% of government revenues, while a third source states that oil and gas combined make up 85% of Bahraini budget revenues. This heavy reliance on oil revenues has led to budget deficits during periods of lower world energy prices, such as in 2017 when a deficit of about 10% of GDP was recorded.

Bahrain has recognized the importance of diversifying its economy away from oil and has made efforts to develop other sectors. These include manufacturing, petrochemicals, and tourism. The country has also invested in the banking and financial services sector, particularly Islamic banking, which has benefited from the regional boom driven by oil demand. Despite these diversification efforts, Bahrain's economy remains heavily dependent on oil and gas, and the success of these alternative sectors is closely linked to oil revenues.

In summary, while the exact percentage of oil exports in Bahrain's total exports is not specified, it is clear that oil is a dominant component. The country's exports and government revenues are heavily reliant on the oil and gas sector, and efforts to diversify the economy are ongoing.

Oil as % of Bahrain's revenue

Oil is a dominant component of Bahrain's economy, with petroleum being the country's most exported product. According to the CIA World Factbook, oil comprises 85% of Bahraini budget revenues. Other sources state that oil revenues make up 70% of government income, a figure that has been consistent since 2007.

Bahrain's economy is heavily dependent on oil and gas, with petroleum accounting for 60% of export receipts, 70% of government revenues, and 11% of GDP. Bahrain's oil and gas sector still plays a very important role in its economy, with about 19% of its GDP coming from this industry. However, there are concerns about the sustainability of these hydrocarbon revenues in the long term, as Bahrain has limited oil wealth compared to its Persian Gulf neighbours.

Bahrain has approximately 124.56 million barrels of proven oil reserves, ranking 67th in the world. At current consumption levels, Bahrain has about six years of oil left, excluding any unproven reserves. Bahrain produces around 63,886 barrels of oil per day and consumes 62,000, meaning it is heavily reliant on imports, with 93% of its oil consumption coming from overseas.

Bahrain has two main oil fields: the onshore Bahrain field and the offshore Abu Safah field, which it shares with Saudi Arabia. In 2018, the Bahraini government announced a significant oil and gas discovery, with an estimated 80 billion barrels of tight oil in place off the country's west coast. This find requires further investigation, but it could significantly boost Bahrain's oil reserves.

Despite the country's success in economic diversification, oil remains a vital source of revenue for Bahrain. The government has recognised the need to reduce its dependence on oil and has implemented initiatives to diversify its economy. These efforts have had some success, with the non-oil sector showing robust growth in recent years. However, oil revenues still play a critical role in Bahrain's economy and budget.

When will Bahrain's oil reserves run out?

Bahrain's oil reserves are expected to run out within the next decade. Oil and gas play a dominant role in the country's economy, with petroleum being Bahrain's most exported product, accounting for 60% of export receipts, 70% of government revenues, and 11% of GDP. Bahrain's economy is heavily dependent on these exports, and the country has invested in infrastructure to support this industry.

Bahrain's oil reserves are ranked 67th in the world, with 124,560,000 barrels of proven oil reserves as of 2016. This is equivalent to 5.5 times the country's annual consumption and is expected to last for 10 to 15 years. However, it is important to note that Bahrain's oil production has already stabilized at 40,000 barrels per day, indicating that the country may be approaching its peak production levels.

The country's heavy reliance on oil and gas exports has led to concerns about the sustainability of its economy in the long term. Bahrain has the least amount of oil wealth among the Gulf Cooperation Council (GCC) countries, and there are worries that the country is not adequately prepared for the upcoming economic crisis when its reserves run out. The government has attempted to diversify its economy and has invested heavily in the banking and tourism sectors. However, these efforts have not been sufficiently successful, and Bahrain's economy remains heavily dependent on oil and gas.

The expected depletion of oil reserves has significant implications for Bahrain's future economic growth and development. It remains to be seen whether the country can successfully transition to a non-oil economy and find alternative sources of revenue to sustain its prosperity.

What will happen when Bahrain's oil runs out?

Bahrain's economy is heavily dependent on oil and gas, which make up 70% of government revenue and 60% of the country's exports. With Bahrain's oil reserves expected to run out within the next decade, the country faces significant economic challenges.

The immediate impact of Bahrain's oil running out will be a loss of revenue for the government, which will affect its ability to fund public services and infrastructure projects. This could lead to reduced public spending, higher taxes, and a shift towards a more service-based economy. There may also be a decrease in foreign investment, as the country's credit rating could be negatively affected.

In the longer term, Bahrain's economy will need to diversify away from its dependence on oil and gas. This process has already begun, with the country investing in the banking and tourism sectors. Bahrain's finance industry is particularly successful, with the country being named the world's fastest-growing financial centre by the City of London's Global Financial Centres Index in 2008. Additionally, Bahrain has benefited from its position as a regional financial and business hub, with a successful diversification into sectors such as heavy industries, retail, and tourism.

However, the transition to a non-oil economy will not be easy. Bahrain's success in attracting investment has been partly due to its previous oil wealth, which has allowed it to invest in infrastructure development and improve the standard of living. With oil revenues declining, Bahrain may struggle to maintain its current level of economic growth and may need to implement further economic reforms to attract foreign investment.

The country's high debt and budget deficits are also concerning, as they indicate that Bahrain has not fully prepared for the upcoming economic transition. Additionally, the global shift towards renewable energy sources could further reduce the demand for oil and gas, accelerating the need for diversification.

Overall, while Bahrain has made some progress in diversifying its economy, the country faces significant challenges in the coming years as its oil reserves diminish. The success of its economic future will depend on its ability to adapt to a post-oil era and develop new sources of revenue.

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