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Friday 01 April 2016 9:51 am

These are the “fragile five” Opec members that could collapse if oil prices don’t stabilise

By: Jessica Morris

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There are five members of the Organization of the Petroleum Exporting Countries (Opec) which risk collapsing if oil prices fails to stabilise.

Brent crude has tumbled from over $110 in the middle of 2014 to around $40 today, largely due to a chronic supply glut. This has heaped pressure onto the balance sheets of some of the world's biggest producers.

The Royal Bank of Canada (RBC) has singled out Algeria, Iraq, Libya, Nigeria and Venezuela as those most at risk. 

It said that the producers are fighting to stay afloat by slashing spending, running down reserves and borrowing.

Iraq and Angola

"Iraq and Angola, two of the more stressed producers, have announced plans to slash capital spending this year by 39 per cent and more than 50 per cent respectively."

"In January, Iraq signed onto to an IMF staff monitored program in the hopes of securing $6-7bn in direct budgetary support and is reportedly looking to revive plans to issue $2bn in Eurobonds this year.

"Also, Angola opened discussions with the World Bank about obtaining new funding"

Algeria

"Algeria, which saw its budget deficit nearly double from 6.2 per cent in 2014 to 11.5 per cent in 2015, has just announced plans to issue local debt and is also seeking Chinese financing for key infrastructure projects."

Nigeria

"Nigeria, which like Iraq is also coping with the twin challenges of a fiscal crisis and a virulent extremist threat, has also approached the World Bank and the African Development Bank for $3.5bn (£2.4bn) to meet its severe budget shortfall."

Venezuela

"Since 2007, Venezuela has borrowed more than $50bln from China through oil for loan agreements."

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