Saudi budget ‘unaffected by oil price drops’
Riyadh, August 10, 2014
Recent oil price slumps and the unrest in some of the regional oil producing nations will not directly impact Saudi Arabia’s current budget even though they might have a bearing on the kingdom’s oil revenues, a report said.
The recent steep drop in oil prices and the continued unrest in oil-producing countries such as Libya and Iraq will not have a direct effect on Saudi Arabia's current budget, despite possibly impacting its oil revenues, a number of economic and petroleum experts have told Asharq Al-Awsat.
"As long as prices remain above 90 dollars per barrel, then they will not have an effect on the Saudi budget throughout the current year, because this budget was drawn up during times when prices were lower than the current ones,” financial expert Fadl Al-Bouainain was quoted as saying in the Arab News report, which cited Asharq Al-Awsat.
Saudi Aabia’s oil revenues would likely be affected by the drop, but that losses would be heavier for producers of shale oil, which is more expensive to produce than crude, Bouainain added.
"Given the limited amounts [of crude] available in some [major] oil producers such as Iraq and Libya, as well as the crisis in Ukraine and the resulting sanctions against Russia, which is one of the most important oil-producing nations, one would have expected a rise in oil prices. However, what is currently happening is a drop in prices in a manner that is surprising, Bouainain was quoted in the report.