Saudi Arabia announced this week that it will reduce its government expenditures by nearly 5% for 2020 after the government approved a “partial reduction in some items with the least social and economic impact,” reports OilPrice.
The move comes nearly two weeks after the collapse of a OPEC+ discussion over global oil production, where a disagreement between Saudi Arabia and Russia has led to a dramatic surge of oil flow into an already heavily saturated market. According to OilPrice, the Kingdom is now facing the challenge of funding government expenses with oil prices three times lower than their break-even value.
Russia is also suffering from the historically low oil prices, with the country’s revenues from oil and gas expected to be US$39.5 billion lower than planned.
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