Brunei's economy: what oil and gas pay for

How much of the economy is oil and gas

The national accounts divide Brunei's output into an oil and gas sector, made up of oil and gas mining and the manufacture of liquefied natural gas, and everything else. The Department of Economic Planning and Statistics, in its report on the fourth quarter and the year 2025, valued gross value added at current prices at BND19,935.7 million in 2025. Oil and gas made up 46.1% of it, down from 46.9% in 2024.

Industry as a whole, which also counts the refinery and petrochemical plants, construction and utilities, made up 59.2% of gross value added in 2025, services 39.7% and agriculture, forestry and fishery 1.2%. The single largest service was government: public administration contributed 11.5%. The department describes the year's growth of 0.7% as coming from the oil and gas sector, while finance, business services, health and construction all shrank.

The shares move with the price of oil as much as with output. In the fourth quarter of 2025 the department recorded the average oil price at US$67.38 a barrel, against US$77.24 a year earlier, and the LNG price at US$8.39 per million British thermal units against US$9.75. Output rose over the same twelve months, so the sector's value at constant prices grew by 10.1% while its value at current prices fell.

Where the oil and gas come from

Oil was first struck at Seria on 5 April 1929, and the British Malayan Petroleum Company, formed in 1922, is now Brunei Shell Petroleum, owned in equal shares by the government and Shell. Wikipedia's article on the economy describes it as the chief producer of oil and gas and the largest employer after the government, and notes that it runs the country's only refinery, with a distillation capacity of 10,000 barrels a day. The history of the find is in Brunei: history.

Production moved offshore. The first offshore well was drilled in 1957, and Britannica states that nearly all of the country's oil and gas now comes from offshore fields off the western piece, almost all of it for export, mostly to Asian buyers. Large gas deposits were found in the 1960s, and the liquefaction plant run by Brunei LNG opened in 1972, with Mitsubishi as a partner alongside Shell and the government. Wikipedia's article reports that most of its output went to Japan under long-term contracts.

Oil production peaked in 1979 at more than 240,000 barrels a day and was then cut back deliberately to extend the life of the reserves. The department's figures for the fourth quarter of 2025 give crude oil output of 114.5 thousand barrels a day, up from 104.9 thousand a year earlier; natural gas of 29.4 million cubic metres a day, up from 26.7 million; and LNG of 776.7 thousand million British thermal units a day, up from 678.1 thousand. Wikipedia's article on the economy records that proven reserves were expected, as of 2015, to last until at least 2035.

Dependence has made the economy follow the oil price. The same article traces GDP rising with the price increases of the 1970s to a peak of US$5.7 billion in 1980, then falling by almost 30% in 1986, when world prices dropped and Brunei cut its own output. The Asian financial crisis of 1997 and 1998 and the collapse in 1998 of the construction firm Amedeo pushed the economy into a mild recession, and 2015 was the third year of recession in a row, after another fall in oil prices and repairs at major wells. Power comes from the same source: in 2020 more than 99% of Brunei's electricity was generated from fossil fuels.

What the downstream plants were built to do

The government's answer to dependence on crude oil and LNG has been to process more of the hydrocarbons at home. The first large project was a methanol plant at Liang, on SPARK, a petrochemical site of 271 hectares, built by a joint venture of Petroleum Brunei with Mitsubishi Chemical and Itochu at a cost of US$450 million and designed to produce 2,500 tonnes a day. It was opened on 25 May 2010.

The second is far larger. Hengyi Industries, a joint venture between the Brunei government and China's Zhejiang Hengyi Group, built a refinery and petrochemical complex with an investment of US$3.45 billion. The company describes it as the largest foreign direct investment in Brunei and states that its first phase began operating in November 2019 after two and a half years of construction. A second phase is planned to expand its aromatics and cracker plants.

The national accounts now count this downstream industry separately, inside the non-oil-and-gas sector. In the fourth quarter of 2025 the department valued it at BND438.4 million at current prices, 8.4% of gross value added, and recorded it growing by 5.0% at constant prices over the year. Hengyi presents its complex as a step towards Wawasan Brunei 2035, the government's long-term plan to diversify growth.

How the state spends the hydrocarbon revenue

The oil and gas money reaches the population chiefly through the state. Bruneians pay no personal income tax, the BBC and the Commonwealth Secretariat both record, and the Commonwealth adds that the government provides free medical services and free education up to university. Wikipedia's article on the economy lists subsidies for food and housing as well, and records that there is no capital gains tax. Petrol is cheap, and Wikipedia's country article counts its low price among the reasons for high car ownership; the British Foreign Office's travel advice notes that cars registered abroad may buy fuel at only 14 designated stations and only the premium grade.

The surplus of the oil boom went abroad. Wikipedia's article describes how the government invested its petroleum revenues of the 1970s in foreign reserves, now managed by the Brunei Investment Agency, an arm of the Ministry of Finance and Economy, and Britannica notes that the return on those investments has become an important source of income.

The balance has not held. The Commonwealth Secretariat dates budget deficits to the low oil prices after 2013, and the IMF's executive board, concluding its consultation on 18 September 2026, estimated the deficit at 18.9% of GDP in the fiscal year 2025 to 2026. It put the widening down to weaker hydrocarbon revenue and continued high spending. Its directors called for fiscal consolidation, better-targeted subsidies, restraint on public wages and new revenue from outside oil and gas, and expected the deficit to narrow significantly in the fiscal year 2026 to 2027 on higher hydrocarbon prices.

Who buys what Brunei sells

Exports dwarf imports. In the national accounts for 2025, exports of goods and services were worth BND14,067.9 million at current prices and imports BND10,228.4 million, against GDP of BND19,655.7 million. Both fell in real terms over the year, imports by 13.8% and exports by 4.1%.

Britannica describes the export trade as almost entirely petroleum and natural gas, which have given Brunei trade surpluses since the early 1970s, and names Japan, Singapore, Malaysia, China, South Korea and India as its principal partners. Imports are the mirror image: nearly all manufactured goods and most food come from abroad.

Air travel is the other export Brunei has tried to build. Royal Brunei Airlines, the national carrier, has aimed to make Bandar Seri Begawan a stopping point between Europe and Australasia, and Wikipedia's country article notes its daily slot at London Heathrow, served by way of Dubai. In the department's accounts for 2025 air transport grew by 16.4% and water transport by 3.2%, among the few services that expanded that year.

Why the Brunei dollar trades at par with Singapore's

The Brunei dollar is pegged to the Singapore dollar at one to one, Britannica records, and the two countries keep a Currency Interchangeability Agreement. The IMF's directors described the currency board arrangement with Singapore in September 2026 as having served the country well and anchored its macroeconomic and financial stability.

Prices have been stable. The IMF recorded consumer prices falling by 0.3% in 2025, on lower world food and commodity prices, and projected inflation of 1.3% for 2026. The external accounts are in surplus: the IMF put the current account surplus at 18.0% of GDP in 2025 and projected 19.5% for 2026, and its directors judged the external position to be substantially stronger than the country's fundamentals would imply.

The IMF and the statistics department give slightly different growth for 2025, 1% in the IMF's press release and 0.7% in the department's annual report. The IMF projected growth of 2.3% for 2026, driven mainly by hydrocarbons.

What Brunei grows and catches

Farming is small and was smaller. Agriculture, fishing and forestry, the economy before oil, had shrunk to a tiny fraction of output by the end of the twentieth century, in Britannica's account, and the government then set out to rebuild them to cut food imports. Britannica reports that Brunei became self-sufficient in poultry and eggs and was approaching self-sufficiency in vegetables, while rice still fell far short of need. Wikipedia's country article gives the share of food that is imported as 60%, three-quarters of it from other ASEAN countries, without a date.

Rice self-sufficiency has been a stated goal for about half a century, in Wikipedia's account. In 2009 a variety called Brunei Darussalam Rice 1 was renamed Laila Rice at a ceremony at the Wasan padi fields, and the royal family reaped the first stalks that August. For beef, the sultanate long relied on cattle stations the sultan owned in Australia, which by a report of 1984 covered more land than Brunei itself; some were sold in 2006 and 2014. Fishing grew under government programmes until, by Britannica's account, domestic catches overtook imports within a decade. In 2025 the department recorded fishery output up 5.4%, livestock and poultry up 2.6% and forestry down 20.5%.

The state has also built an export brand on halal certification. In July 2009 it launched Brunei Halal, a national halal brand meant for export, with a government-owned company holding the trademark and certification by the Department of Syariah Affairs.

Who works in the economy

Oil and gas produce close to half the output with a very small share of the labour force, in Britannica's words, and Wikipedia's politics article describes citizens as relying on the state for employment as well as services. Foreigners make up a large part of the workforce. The Department of Economic Planning and Statistics counted 80,400 temporary residents in its population estimate for 2025, 17.5% of all residents, beside 351,700 citizens and 26,500 permanent residents. Wikipedia's article on the economy describes work permits for foreigners as issued only for short periods and continually renewed.

The IMF's directors in 2026 urged the government to rebalance labour market incentives, align training with the needs of employers and support small businesses, so that more private investment and more private jobs follow. The link between that welfare and the stability of the monarchy is discussed in Brunei: politics.