74-89% of retail investor accounts lose money. The country … He is a fellow at the Metropolitan Society for International Affairs, and his…. The World Can Live Without Iranian Oil The U.S. energy boom will help the global supply meet demand. That email address is already in the database. “We need it, we need it, but I think in 2020 we can live without oil.” It sounds impossible because it is. Oil prices will be above 60 and pushing toward 70 by end of year. Saudi Arabia, the current top oil exporter, is anticipated to be an oil importer within 20 years. One can only hope that the house of saud goes broke. How Long Will The Colonial Pipeline Outage Last? Saudi Arabia existed before oil was discovered in its territory, so there's clear historical evidence that the nation can survive without oil. Recently, talk has centered on the Saudi monarchy’s glimpse of the future: the Vision 2030 plan, whereby it hopes to diversify its economy and end its dependence on the mercurial oil and gas market. Renewable Energy Growth Rate Jumped 45% Worldwide In 2020; IEA Sees 'New Normal', CRAPPIFORNIA DOES IT AGAIN! On the face of it, Arabia without the Al-Saud is inconceivable. Public debt will grow from 1.6 percent in 2014 to 23 percent in 2018. Saudi Arabia knows very well that post-oil era will devastate our economy since 80% of the annual budget is from oil revenues. Borrowing can only cover budget deficits for so long, and growth in the non-oil economy will have to be kick-started if the Saudi vision can be realized. As the world watches an oil price war unfold between Russia, OPEC, and US shale, another major crisis is looming in the Middle East. Saudi deputy crown prince Mohammed bin Salman today announced an ultra-ambitious economic and social makeover that he said would allow the kingdom to … Start Trading CFDs Over 2,200 Different Instruments, Oil Prices Bolstered By Crude Inventory Draw, Dr. Gregory Brew is a researcher and analyst based in Washington D.C. Question is moot really. This comes after anemic growth in 2016, where GDP expanded by only 1.4 percent. But can the world’s biggest oil producer and OPEC’s de facto leader pull it off? Dependency of oil Saudi Arabia can live without oil by 2020 and can achieve from RES 500 at Saudi Electronic University Borrowing can only cover budget deficits for so long, and growth in the non-oil economy will have to be kick-started if the Saudi vision can be realized. But that’s in the short term. California proposes to steer new homes from gas appliances, *****5 STAR Article by Irina Slav - "The Ugly Truth About Renewable Power", Panic Buying Sends U.S. In a new McKinsey Global Institute report, Saudi Arabia beyond oil: The investment and productivity transformation, we discuss how the country has significant opportunities to transform its economy to become more sustainable and less dependent on oil. Weitere Informationen darüber, wie wir Ihre Daten nutzen, finden Sie in unserer Datenschutzerklärung und unserer Cookie-Richtlinie. As for endless wars? Saudi Arabia, OPEC heavyweight and the world's largest crude exporter need a breakeven of $91 per barrel, while Oman needs $82 a barrel, Abu Dhabi requires $65 … The 2017 budget, the most detailed in the country’s history, lays out a series of measures for stabilizing state finances, which plunged into deficit in 2016 as a result of the crash in prices. Save to Library. Related: 2017 Another Year Of Excessive Volatility For Oil Prices. All can be linked directly and indirectly to OPEC+ and oil … The last time they attempted to flood the market with oil it was a disaster. Not only are they presently embroiled in TWO conflicts (Yemen, Syria), they have spent colossal sums of money over the years trying to achieve regional dominance (and the results, at present, are not encouraging). Cuts to construction projects and social programs, estimated at around $20 billion, will help to balance the budget. The Vision 2030 plan, he told the Saudi-owned Al-Arabiya news channel, would ensure "we can live without oil by 2020". The largest single component in the Saudi economic sector, the massive state energy company Saudi Aramco, is to be privatized, and its assets used to develop the country’s manufacturing, tourism and other sectors. Sure they can, THERE kingdom didn't waste there revenues on endless wars and over paid PLUTOCRATIANS! The official Saudi estimate has the deficit amounting to 7.7 percent of GDP in 2017. Any trading and execution of orders mentioned on this website is carried out by and through OPCMarkets. How Saudi Arabia can thrive in a world beyond oil Premium Fuel trucks line up in front of storage tanks at the North Jiddah bulk plant, an Aramco oil facility, in Jiddah, Saudi Arabia … Without these cuts, Mr al-Sabban said, Saudi Arabia could not cope with low oil prices for more than four years. The current fiscal forecast is based on the National Transformation program (NTP) which aims at a balanced budget by 2020. John Sfakianakis, director at Ashmore Group GCC, discusses how cheaper oil prices are impacting Saudi Arabia, OPEC’s refusal to cut production and the nation’s global standing as an oil producer. The dilemma is whether to use its wealth to … Investors are spurred on by the attractive Saudi rial-dollar rate, the continued strength of Saudi oil production (which has shown no signs of slowing down), and the clear interest within the current Saudi government in serious financial and economic reforms. Summary. 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Taking into account the multitude of possible negative repercussions of the OPEC+ breakup, the current oil price slump, which could be leading to very low oil prices in Q2 and Q3, could deal the Saudi economy a tremendous blow. The stakes were raised this year, as draining cash reserves and a resistant American energy sector convinced Riyadh that cuts were needed to boost prices. Merchant of Record: A Media Solutions trading as Oilprice.com. The fact that the fall in oil prices will cause Saudi Arabia’s government to run a large budget deficit has prompted suggestions that it might have to shift oil policy to prop up prices. Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates produce more than 25 million barrels a … And if we can, what would be the consequences? Saudi Arabia is facing multiple existential threats as a renewed oil price slump threatens to not only hit the country’s revenues and economic diversification programs but also the already fragile position of Saudi Crown Prince Mohammed bin Salman. The used-car dealers are also to undergo loss. Please, Tanker Rates Surge After U.S. Fuel Pipeline Outage, Jet Fuel Demand Rebound Needs Return Of International Flights, Nuclear Reactions At Chernobyl “Cause for Concern”, Mexico's New Fuel Nationalization Law Hits Another Wall, PDVSA Reveals How Much Cash It Would Take To Fully Restore Oil Industry. Could Trinidad And Tobago Become A Hotspot For Oil In The Caribbean? But oil remains the most important component in the Saudi economic picture, and the assertions of the 2017 budget and future forecasts are based on the assumption that oil prices will climb back up to $60 by 2018. Falling further Oil prices have more than halved since June. This should make it easy for the Saudi state to raise all the funds its needs on international markets. Is the Republican Party going to perpetuate lies about the 2020 election and attempt to whitewash what happened on January 6th? In the short term, Riyadh will continue to feel the pain of lower-than-normal oil prices. @EH: You must not be aware of the wars that Saudi is currently involved in. It is hoped that by then the budget will be back in surplus, likely spurred on by further sales of Saudi Aramco. With all due respect, EH, that's completely off-base. So today can we envisage Saudi Arabia without the Al-Saud or indeed any royalty? Oil has made unreal decadence a very real possibility in Saudi Arabia. Borrowing can only cover budget deficits for so long, and growth in the non-oil economy will have to be kick-started if the Saudi vision can be realized. Voices If Saudi Arabia's economy is to survive the drop in oil price, it must work on diversifying its industry. The economists forecast that many of the companies belonging to nutrient and catering supply will collapse. “By 2020, if oil stops we can survive,” he said. The stability of Saudi Arabia and the future of MBS depends on the Aramco IPO, Public Investment Fund projects and diversification. The deficit in 2016 was around 12.6 percent, down from 2015’s budget deficit of 15 percent, and if prices stay where the Saudis expect them to, between $50 and $43 per barrel, the budget gap in 2017 will be smaller still. Nothing contained on the Web site shall be considered a recommendation, solicitation, or offer to buy or sell a security to any person in any jurisdiction. The stability of Saudi Arabia and the future of MBS depends on the Aramco IPO, Public Investment Fund projects and diversification. An offshore oil platform near Lavan Island, Iran, Jan. 5, 2017. The idea is still under review, but even considering it out loud is a first for the Saudi royal family and a clear red flag. The U.S. Is Shaping Up For Another Pipeline Saga, OPEC’s December Cuts Are A Bullish Sign For Oil Markets, One Junior Miner May Have Sparked A New Gold Rush In Canada, The Energy Crisis That No One Is Talking About, Big Oil Eyes Wave Of Buybacks After Blowout Earnings. Soon other sectors will face the aftermaths: the rents will fall as their demand would decline, also transport sector is predicted to suffer. Individuals should consider whether they can afford the risks associated to trading. Few challenges are more existential for Saudi Arabia than the need to wean its economy away from an excessive dependence on oil. Sie können 'Einstellungen verwalten' auswählen, um weitere Informationen zu erhalten und Ihre Auswahl zu verwalten. The Saudi leadership had been pivotal in the campaign to bring about an OPEC cut, after resisting production deals for years. All can be linked directly and indirectly to OPEC+ and oil … A government spokesman declared that Saudi growth would be “north of 1 percent,” citing the anticipated investment in renewable energy and a stimulus packaged the Saudi government was planning for the private sector, according to Bloomberg. Download Pdf. it all depends for how long will oil state at 20 if at all, so i think over the next three to four years, saudi arabia will be fine with oil at 20. Gestures towards building investors’ confidence in the Saudi economy have included last year’s $17.5 billion sovereign bond sale, the largest such issue in history and a move which attracted bids totaling $67 billion, according to Bloomberg. Trading and investing carries a high risk of losing money rapidly due to leverage. The estimate comes on the basis of the continued low price of oil, but more importantly on the country’s slashed oil production: as a result of the recent OPEC production deal, Saudi Arabia has agreed to keep its production level at or below 10 million bpd. This is due to many reasons, including: fast population growth and energy inefficient consumption, which is suggested to be a result of energy subsidies. Viewed this way, Saudi Arabia can live with low oil prices for several years. It’s been a strange few years for the Kingdom of Saudi Arabia, as its endured budget deficits for the first time in its modern history, stagnation in oil prices and rising competition from other OPEC members and the American shale boom. The problem is that Saudi non-oil prospects aren’t great, with the non-oil economy on the edge of recession pending the release of some Q316 data. The state is the largest employer and spender in the Saudi economy, which is largely built on the oil and gas industry. The growth outlook for Saudi Arabia has been slashed, as the International Monetary Fund (IMF) announced on January 16 that the world’s largest oil producer would see its GDP grow by only 0.4 percent in 2017. Russian Gas Giant Novatek Presents Answer To U.S. Shale. This is still a historically low rate for a country the size of Saudi Arabia, but the growth in debt could have investors alarmed and scare markets away from accepting more and more Saudi debt, which looks likely to fund continued growth past 2017. If oil prices stabilize, and the country’s economic forecast improves, GDP will likely expand by 2.3 percent in 2018. What is debatable is whether it can survive in its current form without oil, and the answer to that, for me, would be an unequivocal "no". Should the Vision 2030 plan succeed, and the country pivots away from oil and gas, fostering non-oil growth and a balanced budget in the next five-to-ten years, it will have justified Saudi enthusiasm. Among the reforms he announced in his interview were: AMAZING THING IS, they even take care of the needs, "housing, food, education and medical needs of young and old of there people,,, amazing. All those needs they are taking care of has blown a massive hole in their budget, and they need $90 to break even. So, while the Saudi forecasts are upbeat, and Saudi rhetoric around oil prices remains buoyant and hopeful, storm clouds are hovering on the horizon for the oil kingdom. The materials provided on this Web site are for informational and educational purposes only and are not intended to provide tax, legal, or investment advice. Government borrowing an increase in contracts in 2017 should boost non-oil growth from 0.2 percent to 0.8 percent, hopefully reaching 1.9 percent in 2018, according to CPI Financial. Not even the mighty Middle East can survive cheap oil forever. Why Saudi Arabia's declaration it is fine with oil at $30.00 per barrel is unrealistic and delusional. What a bunch of degenerate bloated toads. So, can the Middle East survive without oil? Klicken Sie hier, um weitere Informationen zu unseren Partnern zu erhalten. Therefore, Saudi Arabia launched Vision 2030, which basically aims to wean the country’s economy away from oil, along with implementing much-needed social reforms. According to the IMF, the fiscal breakeven price for Saudi crude is around $80 per barrel. He speaks on “Bloomberg Surveillance.” Should that increase fail to occur, and the Saudi treasury continue to sell off more bonds and accumulate more debt, things in Riyadh could get more unstable. Sie können Ihre Auswahl jederzeit ändern, indem Sie Ihre Datenschutzeinstellungen aufrufen. Texas Freeze Led To Biggest Monthly Drop In U.S. Natural Gas Output, South Africa’s Emergency LNG-To-Power Deals Land In Hot Water, Traders Scramble To Buy Gasoline From Europe After U.S. The Saudi government is infamous for THEIR useless spending, pitiful state employee efficiency, and government embezzlement. Looking ahead, the Saudi government is expected to raise another $15 billion on international markets this year, boosting debt levels as high as 30 percent of total GDP by 2020. Some countries have already begun to shift their economies away from oil production. Gasoline Prices To Near 7-Year High, Related: 2017 Another Year Of Excessive Volatility For Oil Prices, Related: Saudis, Kuwait, Algeria Cut More Than Pledged To OPEC, OPEC Commitments Push Iraq Towards Oil Export Deal With Kurds, Oil Production Here Is Declining Faster Than Anywhere On Earth, The Rebound Is Here: Megaprojects Back On The Table. Saudi Arabia betrayed its fragility earlier this month when Deputy Crown Prince Mohammad publicly endorsed selling shares in Saudi Aramco (the Saudi national oil company), which controls over 15 percent of the world's proven oil reserves. The plan, also known as Vision 2030, was announced in 2016 and is intended to diversify the Saudi economy away from petroleum. 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The official Saudi response decried the IMF’s results as overly conservative. This has resulted in a cut in its growth outlook, down from 2 percent in October, according to Bloomberg. Daten über Ihr Gerät und Ihre Internetverbindung, darunter Ihre IP-Adresse, Such- und Browsingaktivität bei Ihrer Nutzung der Websites und Apps von Verizon Media. Renewable energy is one avenue which Saudi Arabia has tried to invest in to wean domestic demand off oil dependence, hoping to free up capacity for oil sales abroad, thus maintaining revenues. Well, the majority of the Middle East’s oil comes from just six countries. The cuts have come, surprising many analysts, and the OPEC deal looks set to hold at least for the time being. Along with the cuts to production, the Saudi government looks to cut spending. Durch Klicken auf "Alle akzeptieren" stimmen Sie zu, dass Verizon Media und unsere Partner Informationen durch die Nutzung von Cookies und ähnlichen Technologien auf Ihrem Gerät speichern und/oder darauf zugreifen und Ihre personenbezogenen Daten verarbeiten, um personalisierte Werbung und Inhalte anzuzeigen, für die Messungen von Werbung und Inhalten, für Informationen zu Zielgruppen und zur Produktentwicklung. There is no way the Saudi economy can be reformed to be able to live without oil in just four years. With the OPEC production deal holding, at least for the moment, questions have now arisen over how prospects look for the cartel’s biggest producer. Related: Saudis, Kuwait, Algeria Cut More Than Pledged To OPEC.

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