Saudi Arabia’s oil revenues plunged in May to the lowest level since September 2021, official data showed on Tuesday as the world’s top crude oil exporter lowered shipments while oil prices were significantly lower than in the spring of last year.
The value of Saudi Arabia’s total exports slumped in May, mostly due to the decline in oil exports, the Kingdom’s General Authority for Statistics said on Tuesday.
Oil revenues slumped by 37.7% year over year to $19.2 billion (72 billion Saudi riyals) in May 2023. This compares to $30.8 billion (115.5 billion riyals) in oil revenues for May 2022, when Brent crude prices averaged $113 per barrel, following the Russian invasion of Ukraine.
This year in May, Brent oil prices averaged around $75 a barrel, which, combined with lowered Saudi oil exports and lower production as part of the OPEC+ deal, dragged down Saudi oil revenues to a 20-month low.
The share of oil exports in the value of total exports decreased from 80.8% in May 2022 to 74.1% in May 2023, the official Saudi data showed.
Lower oil prices mean the Kingdom is now getting lower revenue and income for its oil-dependent economy compared to the windfall from last year when Saudi Arabia received as much as $326 billion in oil revenues, its biggest oil sales haul in the era of Crown Prince Mohammed bin Salman.
But as of May 2023, Saudi Arabia’s crude oil exports have started to decline as the OPEC+ cuts began to take effect. That month, Saudi exports slumped to below 7 million bpd for the first time in many months. Crude shipments out of the world’s top exporter could further decline as Saudi Arabia is now cutting its production by an additional 1 million bpd in July and August.
Saudi Arabia’s efforts to prop up oil prices with large production cuts will slow down its economy, which could even shrink this year and become one of the worst performers among G20, from the fastest-growing economy in this group last year, analysts say.
By Tsvetana Paraskova for Oilprice.com
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