Accumulated wealth

With US$44 trillion in oil wealth underground to be converted into financial wealth, the current sovereign wealth fund (SWF) holdings of US$1.5 trillion in financial wealth reflect a fraction of this multi-generational oil-to-equities transformation. In addition, there are billions of dollars’ worth of official foreign reserves held by GCC central banks.

Thus, even though the SWFs of the GCC countries are already among the biggest in the world, in light of the size of their proven oil reserves, they are still relatively ‘young’ in this oil-to-financial-assets transformation process, and should grow substantially larger over time.

According to McKinsey, even at $50 a barrel, the GCC would earn a cumulative $4.7 trillion by 2020 – 2.5 times their earnings over the past 14 years. At prices around $100 a barrel, they would earn $8.8 trillion by 2020.
The accumulated wealth level is considerable, as the combined nominal Gross Domestic Product of the six GCC states reached ca $1 trillion last year. The current wealth level provides the GCC countries with capital for strategic investments in order to diversify the local economies and recycle petrodollars in the real economy.