Saudi Arabia is expected to have a poor economic situation similar to the one it has trapped during 2015-2016, when oil prices in world markets have fallen to historical levels that are economically effective due to the abundance of supply.
In an article titled "As oil prices continue to fall, Saudi Arabia is stepping on a thin layer of snow" published by Oil News, an energy news agency, the Times says that energy officials in Saudi Arabia are stunned by what is happening in the oil markets at the moment, And that they have to worry about the price of despair.
Although the kingdom has breathed its breath after threats of an economic collapse in 2015-2016 due to oversupply and subsequent low prices, things look bleak again, with expectations that Saudi Arabia and independent producers will fail to raise crude prices despite their decision to reduce Production will start in December.
The writer pointed out that the Saudi budget suffered a large deficit following the drop in oil prices to thirty dollars, due to a significant increase in the production of US rock oil in conjunction with the decision to raise production Riyadh.
He pointed out that this situation forced Saudi Arabia - by the end of 2016 - to resort to producers from outside OPEC, led by Russia, to take decisions to reduce the supply in the markets to end their suffering, by restoring the balance of the market between supply and demand.
The author noted that the decisions taken by the so-called "OPEC Plus" pushed prices to highs in October 2017, raising consumer concerns.
| US crude oil supplies push oil prices down (Reuters) |
Collapse
Although Russia helped Saudi Arabia control the oil markets, the kingdom appeared to have turned back, and the vision of Crown Prince Mohammed bin Salman to reform the economy by reducing dependence on oil had collapsed.
Prices have fallen again by 40 percent, amid oversupply caused by large-scale infusion of large producers and a slowdown in the global economy, in part due to continuing trade tensions between Washington and Beijing.
The writer also pointed out that the biggest damage to the Saudi plan to improve its global image and economy was the accusation of the Kingdom of assassinating journalist Jamal Khashoggi, which led to a decline in the flow of foreign investments towards the Kingdom, which threatens the return of the days of the crisis 2015-2016 difficult.
He pointed out that oil prices are currently continuing their downward trend amid sharp fluctuations of the markets.
"It remains to be seen whether the new oil production agreement between OPEC and its allies to cut production of 1.2 million barrels per day from January to six months will help ease concerns in the oil market and reduce excess supply."
But as the US continues to increase its production and the prospect of a trade deal between Washington and Beijing, oil prices are likely to remain between $ 40 and $ 50 or less in the first quarter of next year, a point that brings to mind the Saudi Arabia suffered from it in 2015-2016, where the kingdom barely survived an economic crisis.