Abu Dhabi, UAE:  While the Ukraine crisis is causing havoc on the global economy, its impact on the Middle East has not been as dire.

Gulf states, some of the world’s largest hydrocarbon producers, are seeing billions of dollars added to their coffers as a result of an oil price spike sparked by the Ukraine crisis. They are projected to post their first budget surpluses following an eight-year oil slump exacerbated by a pandemic-related decline.

According to a February report by Mitsubishi UFJ Financial Group (MUFG), the Gulf Cooperation Council (GCC) nations are anticipated to witness a 6.1 percent gain in GDP in 2022 as a result of higher oil prices, as well as fiscal surpluses for the first time since 2014. Saudi Arabia, Oman, the United Arab Emirates (UAE), Kuwait, Qatar, and Bahrain comprise the GCC.

“This will lead to an aggregate GCC fiscal surplus in 2022 of $27 billion,” said MUFG, adding that recently implemented austerity measures, as well as the oil surge, will support balance sheets.

Oil prices have fallen during the epidemic due to oversupply and a restriction on demand. In March 2020, the benchmark Brent crude oil price was $22 per barrel. By early March, it had reached a 14-year high, surging beyond $130 a barrel as Russia’s war in Ukraine became more violent.

Gulf governments that rely heavily on hydrocarbons for revenue are accustomed to oil booms and busts. They have previously increased their rhetoric about diversifying revenue streams during busts but frequently fell short of the same aspirations during booms.

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