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Saudis Expect Crude Revenues to Increase
Saudis Expect Crude Revenues to Increase

Saudis Expect Crude Revenues to Increase

Saudis Expect Crude Revenues to Increase

Saudi Arabia expects oil revenues to jump about 80% by 2023 to help the kingdom record its first budget surplus in a decade, according to people with knowledge of the matter.
Under a six-year program to balance the budget, officials predict rising oil prices and output will push income from oil sales to $214 billion from around $120 billion this year, the people said on condition of anonymity because they are not authorized to share the data publicly. It assumes the price of oil will reach $75 a barrel, Bloomberg reported.
Non-oil revenue, excluding income from the Public Investment Fund, would increase 32% to 337 billion riyals, they said. While Saudi Crown Prince Mohammed bin Salman’s plan to transform the economy aims to reduce its reliance on oil in the long run, higher crude prices are central to efforts to support growth while introducing measures that would help boost revenue from other sources.
The kingdom has led a drive among major non-OPEC members to stabilize oil markets through production cuts that have helped Brent crude prices exceed $60 a barrel.
"The oil revenue forecast looks challenging given the development in the shale industry," said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
The strong oil revenue growth in 2017 will be difficult to repeat.
Authorities expect oil production to increase from an average of 10 million barrels a day this year to 11.03 million barrels in 2023. For 2020, they predict output of 10.45 million barrels a day, generating $165 billion in revenue, the people said.
The Ministry of Finance declined to comment.
The scenario may signal that the world’s biggest oil exporter does not currently see a need to extend the agreement to cut production beyond 2018 as a global supply glut eases.

 

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