Saudi Arabia’s oil revenue is expected to jump about 66 per cent this year to about $249 billion amid surging crude prices that will enable the Arab world’s biggest economy to boost spending, according to Jadwa Investment.
Brent, the benchmark for two thirds of the world's oil, rose 69 per cent year on year in the first quarter of this year to an average of $103 per barrel, and that rise was reflected in a “substantial jump in royalties and income tax received by the Ministry of Finance", Asad Khan, chief economist and head of research at Jadwa, said in a research note on Wednesday.
“As oil prices remain elevated, and Saudi crude oil production rises in line with the Opec+ agreement, we expect government oil revenue to continue showing sizeable yearly rises.”
Both Brent and West Texas Intermediate, the benchmark for US crude, have surged more than 60 per cent since the beginning of the year. Brent climbed to a notch under $140 per barrel in March, its highest since 2008, before giving up some gains.
The war in Ukraine and the subsequent western sanctions against Russia, the world's second-largest energy exporter, have caused oil prices to soar. The tightening net of sanctions is stoking fears of a supply shock to the global energy market amid strong demand for crude.
Brent is expected to average $100 a barrel this year, its highest median since 2013, according to the World Bank. Emirates NBD expects crude to average $120 per barrel in 2022.
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