The International Monetary Fund (IMF) has forecast that the oil states in the Middle East will see a US$1.3 trillion boost in additional oil and gas revenue due to the Russian war in Ukraine.
According to the IMF’s director for the Mena region Jihad Azour, the conflict has elevated energy prices and will create a windfall over the next four years.
The IMF had previously estimated in April that Mena states would see a windfall of $818 billion.
The additional revenue will be a boon to the many sovereign wealth funds in the region, some of which have invested heavily in recent months as well as during the height of the pandemic, taking advantage of the decline in valuations of many listed companies.
Azour told the FT that it is important that the wealth funds “invest for the future” by focusing on sectors such as the global energy transition and technology that will enable an increase in domestic productivity.
“In addition, their investment strategy could benefit from the fact that asset prices have improved for new investors, and the capacity to increase their market share in certain areas are also opportunities,” said Azour.
Saudi wealth fund, the Public Investment Fund, has recently invested $7 billion in a number of US stocks, including Amazon, Alphabet, BlackRock and JPMorgan Chase, according to Bloomberg.
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