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Corporate Finance, Capital Management Article, Investing Gulf's oil profits windfall
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Investing the Gulf's oil profits windfall

  • Surging oil prices have turned member states of the Gulf Cooperation Council (GCC) into financial powerhouses.
  • McKinsey research indicates that between 2007 and 2020, they will earn $5 trillion to $9 trillion from exports of crude oil.
  • Depending on oil prices and levels of domestic investment, 30 to 60 percent of this windfall could flow into overseas capital markets.

audio downloadThis article includes a podcast of a conversation with Kito de Boer, a director in McKinsey's Dubai office, and Diana Farrell, director of the McKinsey Global Institute, discussing the implications of the Gulf’s growing wealth.

This article contains the following exhibits:
  • Exhibit 1: In 2006, the foreign assets of companies, sovereign wealth funds, and wealthy individuals in the Gulf Cooperation Council (GCC) states topped $1.9 trillion, because of rising oil prices.
  • Exhibit 2: The GCC states will earn oil revenues of almost $9 trillion by 2020 if oil prices remain at $100 per barrel.
  • Exhibit 3: Oil prices will determine the volume of wealth that the GCC states could invest.

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