• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 3 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 10 hours Could Someone Give Me Insights on the Future of Renewable Energy?
  • 22 hours How Far Have We Really Gotten With Alternative Energy
  • 2 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 2 days Bankruptcy in the Industry
  • 3 days The United States produced more crude oil than any nation, at any time.
U.S. Drilling Activity Inches Up

U.S. Drilling Activity Inches Up

The total number of active…

Will Namibia Become OPEC’s Newest Member?

Will Namibia Become OPEC’s Newest Member?

Namibia wants to join OPEC…

Saudi Arabia Faces Budget Deficit Despite Higher Oil Prices

Saudi Arabia is about to slip into a budget deficit in the 2023-2024 financial year despite higher oil prices, the finance ministry has said.

The deficit was estimated at 2% versus an earlier projected surplus of 0.4%, and gross domestic product growth was seen at 0.03%, the ministry also said, as quoted by Reuters.

The deficits will continue, too, because of Riyadh’s expansionary spending plans, the ministry noted. These plans appear to be expansionary enough to offset the effect of higher oil prices resulting from production caps.

Meanwhile, Riyadh is preparing to tap international debt markets in order to “enhance the kingdom's position in international markets".

The current price rally in oil will help the kingdom rake more money in, with budget revenues seen at 1.18 trillion riyals, or $310 billion, up from an earlier projection of 1.13 trillion riyals, or $300 billion. Still, the updated revenue figure is substantially lower than last year’s revenues, which came in at 1.268 trillion riyals, equal to about $340 billion.

Spending for the current financial year, meanwhile, has been revised upwards, widening the budget deficit gap.

"The higher spending targets released in the Saudi government budget indicates that domestic growth will remain strong," Mazen al-Sudairi, head of research at Al Rajhi Capital, told Reuters. "The increase in spending should support the 4% growth in non-oil GDP next year."

Speaking of non-oil GDP, growth there is seen as stronger than growth in oil GDP, per the finance ministry’s statement. The institution estimated non-oil growth at a respectable 5.9% for the current fiscal year.

ADVERTISEMENT

“We need to make sure that we have predictable, sustainable expenditure that does not fluctuate with oil prices,” Finance Minister Mohammed al-Jadaan told the FT last year. “Otherwise we will go back to the previous [practices] when you have more revenues you spend more, and when you don’t have revenues you spend less, which is very difficult for the economy.”

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • George Doolittle on October 02 2023 said:
    Norway thanks to Equinor is estimated to be producing taxable events for the Government there of somewhere around $20,000 US Dollars per person. No problem getting gold in the Nordic Countries if you like as well nor getting electricity, a Navy, infrastructure, more energy output...everything...not that the United States doesn't "produce" these types of political "victories" as well. Coal, natural gas, nuclear power, the electrical grid, battery powered vehicles, Tesla in particular, Social Media, Amazon, Google, Healthcare the list is endless in the USA for creating private sector solutions to a sadly and criminally "manufactured crisis" of a so called energy/oil type. One solution could be encouraging people to walk which is very true of Europe. I don't think this is true of Saudi Arabia which is very much a Society of "jet aircraft" and yes I agree therefore one in critical need of not just oil but the distillate fuels that power this lifestyle. The United States also produces these types of fuels so does Canada...and of course the aircraft to "power" this lifestyle. Long $hmc Honda Motors Corporation strong buy.
  • Mamdouh Salameh on October 02 2023 said:
    This only conforms what I have been saying all through that the Saudi voluntary production cut since June has nothing to do with the market and prices and everything to do with production difficulties.

    Why else would Saudi Arabia be sacrificing lucrative crude oil exports at prices far higher than its breakeven price of $83-$85 a barrel and causing its budget to go to deficit when with current prices it would be having a surplus?

    Why else would Saudi Aramco be seeking to acquire more international oil and gas assets if not to bolster its declining production and by extensions its export?

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News