Saudi Arabia received as much as $326 billion in oil revenues for 2022, its biggest oil sales haul in the era of Crown Prince Mohammed bin Salman, although monthly revenues have been lower in recent months after oil prices slid to around $80 per barrel at the end of last year.
Saudi Arabia recorded its highest-ever oil revenues back in 2012.
The rise in oil prices last year, especially the spike in the first half to over $100 a barrel after the Russian invasion of Ukraine, raised the revenues for the world’s largest crude oil exporter. The value of oil exports accounted for more than 70% of all Saudi exports last year.
In December 2022, oil exports increased by 11.1% year over year to $22.8 billion (85.5 billion Saudi riyals), but fell compared to November, according to data released by Saudi Arabia’s General Authority for Statistics on Tuesday. The share of oil exports in total exports increased from 71.9% in December 2021 to 79.0% in December 2022, the authority said.
China, Japan, and India were Saudi Arabia’s main trading partners for exports in December 2022, due to the oil sales.
While many economies floundered in 2022 due to inflationary pressures and soaring energy prices, Saudi Arabia’s economy grew by 8.7% last year, thanks to its oil industry and exports.
According to flash estimates, real GDP in the fourth quarter of 2022 grew by 5.4% compared to the same period of 2021, and the real GDP during the year 2022 rose by 8.7% compared to 2021, the General Authority for Statistics said last month. Saudi economic growth was the highest among the G20 group of countries.
Thanks to rising oil income, Saudi Arabia also booked its first annual budget surplus in nearly a decade. Analysts believe that the Kingdom needs oil prices at $75-80 per barrel to balance its budget.
By Tsvetana Paraskova for Oilprice.com
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Therefore, Crown Prince Mohammed bin Salman has now both the financial clout and the opportunity to accelerate the diversification of the Saudi economy, pay back a big chunk of Saudi borrowing in 2020 and also augment the country’s financial reserves.
Geopolitically and economically, the days when Saudi Arabia will let the United States treat it as a vassal State have gone forever. With a GDP of $2.0 trillion in 2022 based on purchasing power parity (PPP), the Saudi economy is one of the largest economies in the world ranking number 12. Moreover, Saudi Arabia under the leadership of its young Crown Prince is no longer in need of the so-called US protection and is free to acknowledge that the World Order is changing and therefore it is up to it to pursue strategic alliances with whoever it chooses and also take crucial decisions including accepting the petro-yuan as payment for its crude exports to China without fearing repercussions and threats from the United States.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert