This morning Brent oil fell to less than $30 for the first time in 12 years.
During the Scotland independence campaign, the Scottish National Party based its projections and campaign on an oil price of $113 going forward and that would have provided revenues of about £7 billion per year.
At current prices the oil revenue accruing to the Scottish budget would be less than £0.1 billion compared to the planned for £7 billion per year. Back in July 2015, the expected revenue (at $45/barrel) was reduced to be about £0.16 billion per year (£800 million in 5 years). This is just the impact of price. Considering the reduction in market share and reduced volume, the revenue is likely to fall well short of that and not much more than £0.08 billion per year (£400 million over 5 years).
With actual oil revenues at just 10-15% of what was assumed, an independent Scotland would now be close to default and a declaration of bankruptcy. At least Scotland is a little more diverse and not quite as dependent on oil revenues as Norway is. But Norway is now dipping heavily into the huge oil fund it has stashed away over the good years. But even with the fund, the Norwegian kronor has lost about 30% of its value in the last year. Scotland, of course, has no such fund to fall back upon.
It seems highly unlikely that there will be any new independence referendum in Scotland until either
- the budget oil dependence is reduced drastically, or
- the oil price is over $60 per barrel.