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Saudi budget deficit shrinks as oil revenue rises on higher crude prices

Saudi Arabia posted a $9.1 billion shortfall for the three months through June, down from 125.7 billion riyals in the prior quarter, as oil revenue rose 28% while spending fell 3.5%.

Reported · Written up by our desk · Energy

Saudi Arabia’s quarterly budget deficit narrowed sharply in the second quarter, helped by higher crude prices even as war-related disruptions continued to weigh on production, according to OilPrice.

The Kingdom recorded a 34.3 billion-riyal, or $9.1 billion, shortfall for the three months through June, down from 125.7 billion riyals in the first quarter, the outlet reported. Oil revenue rose 28% quarter over quarter as crude prices jumped, while spending dropped 3.5%.

War has been especially damaging for output, OilPrice said, with Saudi oil production still well below prewar levels after Iranian attacks and the closure of the Strait of Hormuz disrupted exports. The oil sector contracted almost 25% during the quarter, pulling on the broader economy.

To offset reduced volumes, Riyadh redirected crude via pipelines to the Red Sea port of Yanbu to capture higher prices, OilPrice added. Brent was near $90 per barrel Thursday and is up more than 47% this year, while EFG Hermes estimates Saudi now needs oil around $115 per barrel to cover spending, up from about $96 last year.

Latest closeWTI crude $84.21 ▼0.3%|Brent $89.45 ▼1.4%

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