crude oil

Saudi Arabia to raise oil revenue in 2017

RIYADH, December 28, 2016 – Saudi Arabia projects its oil revenue to increase by 46% in 2017, capitalising on the expected uptick in oil prices following the OPEC agreement on reducing output.

According to a budget statement by the Ministry of Finance last week, the Kingdom forecasts around USD 128 billion from oil sales next year, up from USD 87.67 billion reported for 2016. The statement also noted that non-oil revenue would increase by 6.5% to reach USD 56.49 billion.

 

“The oil revenue increase is in line with the expectations by the authorities that the market is rebalancing higher, and is clearly a sign that oil prices are expected to average USD 60 per barrel next year,” John Sfakianakis, director for Gulf Research Centre, was quoted as saying by local media.

February Brent crude futures reached USD 56.50 per barrel in London on Wednesday, nearly double the price level seen in January.

Saudi Vision 2030, unveiled by Deputy Crown Prince Mohammed bin Salman in April, is aimed at ending the oil addiction of the country, with the government planning to spend USD 11.2 billion on the economic programme next year, which is around USD 2.4 billion more than 2016.

In December, the Ministry of Finance said the 2017 deficit would come out at 7.7% of GDP or USD 52.7 billion, down from 11.5% and USD 79.2 billion for this year. The figures beat the IMF 2017 forecast of 9.5%. The ministry projects spending to reach USD 237.3 billion next year, up 8% over 2016.

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