Saudi Arabia expects oil revenue to jump by 46% next year after a deal between the kingdom and other producers to curb output drove up global prices, Bloomberg reported.
The world’s top oil exporter expects to collect about $128b from crude sales in 2017, up from an estimated $88b in 2016. While overall revenues for 2017, including non-oil revenues, are expected to grow 31% from 2016 to just over $184b, with non-oil climbing 6.5% to about $56.b according to RT.
Oil prices have rallied since the Organization of Petroleum Exporting Countries (OPEC), of which Saudi Arabia is the largest member, reached a deal with other producers to curb output in 2017. The budget is based on the assumption that global producers cut output as promised, Saudi Energy Minister, Khalid Al-Falih, said. Benchmark Brent crude traded above $55 a barrel late December, almost double its low in January.
The Saudi government relies heavily on oil sales for revenue, and its finances have taken a blow since prices started tumbling in 2014. Total projected revenue this year, at $141b, is less than half what it collected in 2013, when oil was trading above $100 and made up 90% of revenue. The kingdom has implemented austerity measures in 2016 to weather the downturn. In April, Deputy Crown Prince, Mohammed bin Salman, deployed the Saudi Vision 2030, an economic plan to end the country’s “addiction” to oil. The government intends to spend over $11b on the program in 2017, up from $2.4b in 2016.