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Saudi Arabia's oil export revenue falls 21.9%

Increase font size  Decrease font size Date:2020-06-09   Views:296
Saudi Arabia's export revenue was Riyal 197.84 billion ($52.69 billion) in Q1 2020, down 20.7% from the same quarter in 2019, mainly due to a 21.9% decline in oil export revenue, the kingdom's General Authority for Statistics announced June 7.

Total oil export revenue for Q1 was Riyal 149.95 billion, down from Riyal 192.03 billion for the same quarter the previous year. This is despite forward sales of hydrocarbons mitigating the full impact of the oil price crash on the country's quarterly revenues. Oil still made up 77% of exports, little changed year on year, showing little progress in diversifying the economy.
The entirety of the kingdom's hydrocarbon output is produced by the newly listed Saudi Aramco. During the company's listing on the local Tadawul stock exchange in December, it pledged to distribute $75 billion in dividends annually, through 2024. This amounts to a payment of $18.75 billion per quarter, equal to almost half of the total oil revenue. The kingdom amassed a budget deficit of Riyal 34.107 billion for the quarter. The Ministry of Finance has already announced plans to increase borrowing and tap cash reserves to plug this year's shortfalls.

The country's economy has been severely hit by the coronavirus pandemic and the oil price crash. Saudi Arabia's budget for 2020, announced in December, assumed an oil price of $60/b, and the country's fiscal breakeven price is $80/b, according to the International Monetary Fund. The Brent front-month contract was recently priced at $42.30/b.

The kingdom's export volumes are limited by its commitments to the OPEC+ production cuts, in an agreement intended to counteract plummeting demand caused by the coronavirus pandemic and to steady the market.

On June 6, the 23 members of the OPEC+ alliance renewed their April agreement to reduce production by 9.6 million b/d through July. Under the plan, Saudi Arabia is cutting its monthly output by at least 8.5 million b/d, which is down almost 30% from the 12 million b/d it said it was producing in April. The kingdom had previously agreed to institute an additional 1 million b/d in cuts for June but has indicated it would not be willing to continue those curbs in July.
 
 
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