OPEC’s biggest producer Saudi Arabia would need oil prices at US$80-85 per barrel in order to balance its 2019 budget, Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), has told Reuters.
Saudi Arabia’s officials, including Energy Minister Khalid al-Falih, don’t discuss publicly ‘targeted oil prices’ or a desired level of oil prices that would be comfortable to the Kingdom’s finances, but analysts and the IMF have estimates what oil price level would be enough to cover Saudi Arabia’s budget spending.
For this year, “if you take the (2019) budget as presented with everything remaining equal, a breakeven point would be around $80-$85 dollars,” the IMF’s Azour told Reuters.
The oil price slump in the fourth quarter of 2018 has certainly affected the public finances of the biggest oil exporting nations, including OPEC’s biggest, Saudi Arabia.
Although Azour doesn’t see the price slump affecting the Kingdom’s ability to finance itself, he expects that those lower prices would weigh on the fiscal position of Saudi Arabia.