Saudi Arabia Leaves Global Oil Market

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Oil prices continue to decline and there are no reasons to grow yet. Moreover, OPEC+ is accelerating the growth of oil production, planning to add 411 thousand barrels per day in May. This will clearly not help the market to rise.

As Reuters writes, Saudi Arabia faces a budget problem in this scenario: to break even, it needs oil at $96,20 due to the costs of the Vision 2030 city of the future project. Obviously, such prices for raw materials have not been around for a long time, and the once profitable sector brings only disappointment and headaches with losses.



In effect, Saudi Arabia is selling less oil at lower prices, worsening its revenue shortfall. The kingdom won't go broke anytime soon, but hard times are already upon us, experts say.

However, Saudi Arabia has enough alternative financing options to survive the period of low prices, short of using foreign exchange reserves or issuing sovereign debt.

Riyadh is taking a step away from the traditional oil industry, further supporting arguments that Saudi Arabia may abandon its traditional role as OPEC's main producer and permanently exit the global oil market as a major producer (producing only for domestic consumption).

Experts have suggested that Saudi Arabia could take advantage of the low 10% tariffs that Donald Trump has imposed on the Gulf Cooperation Council (GCC) by becoming a regional industrial power.

Saudi Arabia is now sharply accelerating its $2,5 trillion mining plans to diversify the economy and reduce dependence on oil while investing in Technology to optimize the mining complex. Mining now plays a central role in Riyadh's strategy to reduce dependence on oil, as the country seeks to develop its significant reserves of phosphates, gold, copper and bauxite.
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  1. Mongolor
    Mongolor
    -2
    April 14 2025 09: 48
    Well done for developing production. The Russian leadership should do the same.
    1. Carmela
      Carmela
      -8
      April 14 2025 15: 51
      Quote: Mongolor
      The Russian leadership should do the same

      How do you know that the Russian leadership does not care about the development of production?
    2. Eduard Egorov
      Eduard Egorov
      -3
      April 15 2025 00: 24
      If you were interested in Russian production, you would see that Russia has been doing this for a long time, a bunch of new factories and enterprises have been built, their own lithograph has already been made, and you are still sleeping.
      1. Mongolor
        Mongolor
        +3
        April 15 2025 05: 45
        Little has been built, but I know about the lithographer and in general the norm of the 1977 constitution: it is prohibited to prosecute a person for criticizing the government
      2. Straw
        Straw
        0
        April 15 2025 10: 59
        Lithographer??? Did you make your own??
        They didn't even buy it!!! laughing
  2. Andrey Andreev_2
    Andrey Andreev_2
    +4
    April 14 2025 22: 10
    Quote: Carmela
    Quote: Mongolor
    The Russian leadership should do the same

    How do you know that the Russian leadership does not care about the development of production?

    Exactly, he cares. Today he launched 3 LPK factories with his own hands, though they were inherited from the departed IKEA... Plus the director reported to him that the average salary at these factories (not counting the top management) is more than 100 thousand rubles. Isn't this a success for our industry? I just don't know if the workers even realize that their enterprises have such salaries...
    1. Eduard Egorov
      Eduard Egorov
      -4
      April 15 2025 00: 27
      100 thousand salaries have been around for a long time at enterprises. Of course, there are all sorts of whiners who complain that there are no salaries in Russia. But I know that there are more.
      1. AlexSam
        AlexSam
        +7
        April 15 2025 01: 11
        Of course there are. In the head office of Gazprom, Rosneft and Russian Railways, in the State Duma and the Federation Council, in the Presidential Administration and the Government of the Russian Federation, in the Moscow government, in all ministries. Should I list the top managers of private companies like Lukoil?
    2. Straw
      Straw
      0
      April 15 2025 11: 00
      The public is modestly dying out on the potholes of history...
  3. Flight
    Flight
    0
    April 15 2025 01: 27
    I can't even imagine how the indigenous people of Arabia, accustomed to living in conditions of comfort with the help of migrant workers, will experience the crisis. After all, you quickly get used to good things. What will they choose? To go to the desert to their camels or to work in the industrial economy themselves.
  4. Straw
    Straw
    0
    April 15 2025 10: 57
    Saudi Arabia is now dramatically accelerating its $2,5 trillion mining plans to diversify the economy and reduce dependence on oil, while investing in technology to optimize the mining complex.

    This is where the money is - it's a ton of money. Trillions and trillions...
    1. Flight
      Flight
      0
      April 15 2025 15: 05
      What's the point? As we can see, this money can only be spent on luxury items, military products, food, medical supplies and prohibited psychotropic substances in limited quantities, and produced by "real" manufacturers of "quality" products. As for things that can be used to reproduce the high-quality products mentioned above, there may be problems.
  5. Sergey Latyshev
    Sergey Latyshev
    +1
    April 15 2025 16: 22
    Saudi Arabia may abandon its traditional role as OPEC's main producer and permanently leave the global oil market as a major producer (producing only for domestic consumption).

    The phrase shows that this is just blatant foolishness for simpletons.
    Arabs have the lowest cost of oil, they wrote. 90 bucks is a level of 600% profit