Saudi Arabia forecasts oil revenues to increase 80% by 2023

December 31st

Saudi Arabia’s plan to delete its budget deficit by 2023 relies on the increase in Oil Revenues over the next six years. That is what Saudis predict, according to unnamed sources. Plans are for the Kingdom to boost its output to a level that, combined with an assumption of higher oil prices, will allow Riyadh to book its first budget surplus since 2013. The six-year program to balance the budget foresee a rise in oil prices and output able to push income from oil sales from $117 billion to $214 billion. It assumes the price of oil will reach $75/bbl.

Crown Prince Mohammed bin Salman’s plan is to transform the economy to reduce its reliance on oil in the long term and to do that he needs higher crude prices to support growth while introducing measures that would help boost revenue from other sources. In order to be able to take full advantage of higher prices Saudi Arabia plans to rise crude oil production to 11.3 million bpd in six years. This year, the daily average will stand at 10 million barrels, because the country is bound by its participation in the OPEC-wide production cut and has to regulate its production up and down to compensate for laggards countries such as Iraq.

Monica Malik, chief economist at Abu Dhabi Commercial Bank about the oil revenue forecast said: “it looks challenging given the development in the shale industry” […] “The strong oil revenue growth in 2017 will be difficult to repeat.”

Economy Minister Mohammad Al Tuwaijri, said that the kingdom “found it appropriate to move to a more optimistic scenario” in fiscal planning. “We’re very satisfied with what happened in 2017, and we’ll continue on this journey.” The budget deficit narrowed to about 9 percent of GDP this year. Authorities expect oil production to increase from an average of 10 MMbpd this year to 11.03 MMbpd in 2023. For 2020, they predict output of 10.45 MMbopd, generating 161 billion dollars in revenue.

Despite some suggestions to the contrary, OPEC’s number-one producer has no intention of making the production cut permanent, and that very well underlines the significance of the exit strategy that OPEC officials are already working on. The exit would have to be very gradual indeed, and will have to be combined with lower production elsewhere if prices of US$75 a barrel are to become a reality as per the Saudi six-year plan.

Our News

Canadian Oil Group strategies to reduce Reliance on U.S.

Since U.S. President is spoiling the American relationship with its neighbour to the north, the Canadian oil industry’s biggest trade group is looking for ideas to reduce its dependence on...

Read More

New well in North Sea for Equinor and Partners

Equinor and partners Lundin and Spirit Energy have struck oil in a wildcat well drilled in the central part of the North Sea Equinor, former Statoil has just made a new...

Read More

Good news for Brazil’s economy: Equinor and Exxon partnered for big Oil Auction

Oil companies Exxon and Equinor become partners at a field off the coast of Brazil thus generating a boost for Brazil’s economy, after weeks of political uncertainty. A consortium of Equinor,...

Read More

Lebanon starts Offshore Oil and Gas Exploration

The first phase of exploration in Lebanon’s potential offshore oil reserves has started Lebanese Energy and Water Minister Cesar Abi Khalil has approved an exploration plan submitted by a consortium of...

Read More

World’s Largest Oil Traders are competing to buy Petrobras’ Nigerian assets

Vitol, Glencore, and Shell are in the running to buy the Nigerian oil assets of Brazil’s state oil firm Petrobras The world’s three largest oil traders are competing to buy the...

Read More

Venezuela suffers but his president buys Oil for Cuba

Maduro buys $440 million foreign oil and send it to Cuba on friendly credit terms while Venezuelans starve. Venezuela has been buying foreign crude to continue supplying political allies such as...

Read More

Shell and Total to develop gas project in Oman

Total and Shell as operators will develop several natural gas discoveries located in Oman. Oman, the biggest Middle East oil producer outside Opec, signed two separate agreements with France’s Total and...

Read More

Poland Cuts Russian Oil Import Dependence

Poland is reducing its dependence on imports from Russia but at a cost Last year Poland’s imports of Russian oil dropped to their lowest level since 2005, according to a report...

Read More

Iran Oil Show 2018

At the exhibition Iran stressed the importance of Iran’s role in the energy market and the will to keep low oil prices. Over 4,000 domestic and foreign companies are participating in...

Read More

Eni, new oil discovery in Egypt

Italian oil company Eni announced an oil discovery in the Egyptian Western Desert. Eni has announced a new oil discovery in the Faghur basin, in the Egyptian Western Desert, 103 km...

Read More

Saudi Arabia needs oil at nearly $90 to balance its budget

Saudi Arabia’s efforts to revive economic growth are still dependent on oil prices, even as the kingdom tries to reduce its reliance on revenue from crude exports. Higher oil prices have...

Read More

Gazprom’s TurkStream reaches Turkish shore

With this new pipeline Russia will pump more natural gas into the European market. Russia’s Gazprom has completed the sea portion of the first line of the TurkStream offshore gas pipeline...

Read More

Become a partner

Our Partners

 

If you are interested in becoming a Dealoil partner please get in touch by emailing us at info@dealoil.co.uk. We look forward to hearing from you. The Dealoil team