Due to the fall in oil prices and production cuts, Saudi Arabia's oil export revenue has dropped to its lowest level in three years.
According to data from Saudi Arabia's main statistical institutions, the export sales of crude oil and petroleum products in June fell to $17.7 billion, a year-on-year decrease of over 9% and a month-on-month decrease of about 12%, due to the fall in oil prices and production cuts.
Oil revenue remains crucial to Saudi Arabia, which is the de facto leader of OPEC and the world's largest exporter of crude oil. These funds support Crown Prince Mohammed bin Salman's economic transformation through massive investments in areas such as electric vehicles, semiconductors, and football.
Saudi Arabia's oil export revenue has dropped to a three-year low.
However, the decline in oil export revenue has hindered Saudi Arabia's economic transformation plans. It is reported that in 2022, the Russia-Ukraine conflict pushed the price of crude oil above $120 per barrel. At that time, Saudi Arabia was earning $1 billion per day from oil exports.
The current trading price of Brent crude oil is about $76, a decrease of 6.2% since the beginning of this year, mainly due to concerns about economic slowdown.
Saudi Arabia has had to reduce or delay some large projects, including parts of the Saudi New Future City (NEOM). Saudi Arabia's production reduction strategy has failed to boost prices.
OPEC+ countries, including Russia, plan to increase production in the fourth quarter.
bp plc (BP.US) Chief Economist Spencer Dale recently stated that with the continuous increase in oil supply from the USA, Brazil, and Guyana, there is limited space for OPEC+ to increase production as this will put pressure on oil prices. He added that besides demand, the oil prices next year will be determined by the tense situation in the Middle East, supply disruptions, and weather conditions.