By Sajith Kumar
VIENNA : Along with global meltdown, declining oil prices are beginning to bite into many government budgets including that of OPEC members.

It was estimated that Iran and Venezuela are in the toughest spot, requiring oil at $90 a barrel for their budgets to break even next year, while Nigeria and Bahrain need crude above $70 a barrel.

Even Arabian Gulf producers are getting close to the oil price they need which is $50 a barrel for their government budgets to break even.

But the brokerage doesn't see relief for another year on weak global oil demand and slack OPEC discipline. It expects oil prices to average $50 a barrel in 2009, down 47% from its previous oil call of $95 a barrel, rebounding to $70 in 2010 and $90 in 2011.

Some analysts said forecasts of global spending on oil projects will fall by 30% to 40% in 2009 to $275-billion.

Venezuela, which funds 46.5% of its budget from oil sales, needs $90 a barrel to avoid a current-account deficit based on production of 2.4-million barrels a day.

Venezuela's national budget for 2009 is based on an average price of $60 a barrel and production of 3.6-million barrels a day whiles the country consistently under delivers by 1.2-million barrels a day.

Country’s flamboyant president Hugo Chavez, suggested that OPEC return to a system of setting a price band for crude oil to enhance market stability, similar to the price band adopted in the late 2009 to keep prices between $22 and $29 a barrel.

Iran is in the biggest trouble, having built its budget for fiscal 2008/2009 based on US$115 oil. Oil production accounts for 57.8% of government spending.

Meanwhile, Nigeria, which derives 85% of its budget from oil sales, needs oil to be around US$80 a barrel.

Outside OPEC, Russia, the world's second-largest oil producer, needs oil at $70 to balance its budget, while Mexico's budget reflects oil at $80 a barrel.