Bahrain has made a new law to lower its oil export income after Trump asked to lower oil prices
On Wednesday, Bahrain’s King Hamad bin Isa Al Khalifa passed a new law changing a rule from 2006. The law reduces the amount of oil export earnings put into the Future Generations Reserve (FGR). This comes after US President Donald Trump asked to lower global oil prices.
New law
The new law starts at the beginning of the next fiscal year and will be published in the official gazette, according to the state-owned Bahrain News Agency (BNA).
Under the new law, for every barrel of crude oil exported outside Bahrain, one US dollar will be deducted if the price is between $40 and $60. If the price is between $60 and $80, two US dollars will be deducted.
If the price is above $80 but less than $100, the deduction will increase to three US dollars. If it’s between $100 and $120, four US dollars will be taken off. Finally, if the price goes over $120, five US dollars will be deducted.
These amounts will not change, and no reserve funds will be used for anything other than investment.
Trump’s plan
Last week, Trump asked OPEC and Saudi Arabia to lower oil prices after announcing plans to increase US oil and gas production. His goal is to hurt Russia’s economy, which depends on oil, and to support efforts to end the war in Ukraine. However, Bahrain reduced its crude oil export costs, even though it is not part of the oil-producing group.
Trump has also warned that he could impose taxes, tariffs, and sanctions on Russia and other countries involved if the war in Ukraine is not ended soon.
What to watch for
Russian President Vladimir Putin said that he and Trump should meet to discuss the war in Ukraine and energy prices. OPEC and its allies, including Russia, have not yet responded to Trump’s request. OPEC is planning to increase oil production starting in April.
Bahrain’s economy
Bahrain’s economy grew by 2.1% in the third quarter of 2024 compared to the same period last year. This growth was driven by a 3.9% rise in the non-oil sector, with the manufacturing sector contributing the most to GDP at 20.1%, followed by the financial and insurance sectors at 17%.
Published: 30th January 2025
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