Saudi oil policy faces uncertain outlook

Significance The Saudi government budget is in deficit, but it can cope with a period of somewhat lower oil prices, particularly if compensated by higher production and exports. The government is managing the fiscal deficit partly through prioritising expenditure and taking on debt. Impacts The threat of production increases could be used by Saudi Arabia to achieve greater compliance from other OPEC+ members. There is still potential for production interruptions from countries such as Libya due to domestic political divisions. The PIF could move with limited divestments to support expenditure plans.