Saudi Arabia expects oil revenue to jump by 46 percent next year following the deal between the kingdom and other producers to curb output and drive up global prices.
The world’s top oil exporter expects to collect SR480 billion ($128bn) from oil sales in 2017, compared with SR329 billion ($87.67 billion) this year, the finance ministry said in a budget statement last week. Non-oil revenue will climb 6.5 percent next year to SR212 billion ($56.49 billion), it said.
Oil prices have rallied since the Organisation of Petroleum Exporting Countries (OPEC), of which Saudi Arabia is the largest member, reached a deal with other producers to curb output next year. Benchmark Brent crude traded above $54 per barrel last week, almost double its low in January 2016.
“The oil revenue increase is in line with the expectations by the authorities that the market is rebalancing higher, and is clearly a sign that oil prices are expected to average $60 per barrel next year,” said John Sfakianakis, director of economic research at the Gulf Research Centre.
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 528bn riyals, 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 this year to weather the downturn. In April, Deputy Crown Prince Mohammed bin Salman rolled out Saudi Vision 2030, an economic plan to end the country’s “addiction” to oil. The government intends to spend 42bn riyals on the programme in 2017, up from 9bn this year, the Finance Ministry said.