• 4 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 7 minutes Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 13 minutes NordStream2
  • 6 hours Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 10 hours California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 14 hours "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 2 days An Indian Opinion on What is Going on in China
  • 2 days "A Very Predictable Global Energy Crisis" by Irina Slav --- MUST READ
  • 20 hours Nord Stream - US/German consultations
  • 2 days Can Technology Keep Coal Plants Alive and Well?
  • 3 days Two Good and Plausible Ideas about Saving Water and Redirecting it to Where it is Needed.
  • 3 days Succession Planning in Human Resources for Vaccinated Individuals in the Oil & Gas Industry
  • 5 days Perfect Energy Storm in Europe: turning our back on fossil fuels is easier said than done!
  • 2 days U.S. : Employers Can Buy Retirement Security for $2.64 an Hour
  • 2 days Storage of gas cylinders

Saudis To Issue Debt As Price Crash And Oil Deal Hit Revenues

OPEC’s top producer and the world’s top oil exporter, Saudi Arabia, may soon tap the international debt market to raise money as the oil price crash and the historic oil production cut deal are hitting the Kingdom’s primary source of external revenues – oil income, four banking sources told Reuters on Monday.   

Saudi Arabia’s oil revenues were already hit by the plunge in oil prices in March after the Kingdom went on a price war with Russia to claim more market share. The Kingdom reduced government expenditures last month to save money as oil income crashed.

The historic oil production cut deal from Sunday, with OPEC+ agreeing to cut their overall crude oil production by 9.7 million bpd in May and June, will be putting additional pressure on Saudi finances because the Kingdom will have to cut a lot from its current production.

According to an analyst who spoke to Reuters, the Saudi cuts in production would reduce the government revenues by almost US$40 billion in 2020 if oil prices average $40 per barrel. A day after the Sunday deal was announced, Brent Crude prices were barely in the low $30s, erasing early Monday gains to fall by 0.70% to $31.23 at 8:20 a.m. EDT, as the market appears to see the deal as not enough to respond to the demand loss.

Middle East oil producers have already started to tap the debt markets amid growing fiscal pressures on their economies and wealth funds. 

Qatar sold at the start of last week US $10 billion in three-tranche bonds, which received four times as many offers. Qatar’s bond issue—the first in the Gulf region since oil prices crashed and the pandemic battered economies and oil demand—was viewed as a test for investor interest in bonds from Middle East’s oil producers amid collapsing oil prices. 

Abu Dhabi also sold US$7 billion in bonds after Qatar’s debt issue, sources told Reuters last Wednesday.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

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