Saudi Arabia 2016 Budget Assumes $45 Average Crude Price

Source: www.gulfoilandgas.com 1/1/2016, Location: Middle East

Saudi Arabia Disclosed its 2016 budget and it shows just how much the global crude oil glut is affecting the finances of the OPEC kingpin. The new budget calls for $224 billion in spending on $137 billion in revenue.

The resulting $87 billion deficit is narrower than the record $98 billion seen in 2015, and it reflects efforts by King Salman bin Abdulaziz Al Saud, who ascended to the Saudi throne in January, to implement spending cuts to offset a steep plunge in crude prices.

Saudi Arabia plans to cut expenditures and sharply raised domestic fuel prices as the world’s top oil exporter attempts to cope with a new era of cheap crude prices. After years of spending its massive oil wealth to bolster the local economy, a steep decline in oil prices has forced the kingdom to reassess these plans.

“The budget comes in light of lower oil prices and economic and financial challenges on regional and international levels...our economy, with the help of God, has what it takes to overcome the challenges,” King Salman said on state television, underlining the challenges facing the kingdom.

The new budget assumes the average global price of crude will rise to $45 per barrel next year. Brent crude, the global oil price benchmark, has lost 35 percent of its value since the start of the year and is now hovering at around $37 a barrel.


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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