Crude oil producing countries have been facing the most financial impact in the last 10 years. Yes.
And the severe financial crisis has been exacerbated by the fact that governments in the OPEC countries have a luxury lifestyle and a habit of overspending.
Saudi Arabia
Saudi Arabia, the largest crude oil producer in the OPEC, brought about many changes in governance and trade. It mainly came with the decision to drastically reduce luxury and wasteful spending.
Crude oil demand and production
As agreed, the price of corona rose sharply due to the demand for crude oil and the many changes in production. This has led to a huge increase in Saudi Arabia’s revenue, which is expected to present the Saudi surplus budget this year for the first time in 10 years.
The amount of funding shortfall
Although Saudi Arabia’s fiscal deficit is projected to be 2.7 percent of GDP this year, the Saudi government has projected a surplus of 90 billion riyals, or about 23.99 billion dollars, roughly 2.5 percent of GDP.
Mohammed bin Salman
Saudi Arabia has been facing a severe financial crisis since crude oil prices began to plummet in 2014, and not only has the Saudi government, led by Prince Mohammed bin Salman, planned to drastically reduce spending and luxury, but has also paved the way for many new trades.
955 billion riyals project
The government of Saudi Arabia, led by Prince Mohammed bin Salman, plans to spend 955 billion riyals next year. It is worth noting that this is a 6 percent lower spending plan than last year. It also plans to spend 10 percent less on military spending by 2024.
1.045 trillion riyals target
Saudi Arabia’s revenue rose 10 percent to 930 billion riyals from 849 billion riyals in the current year. The most important reason for this 10 percent increase in revenue was the rise in crude oil prices. It expects to receive revenue of 1.045 trillion riyals next year.
What is the decision of the oil giants .. Will it benefit India?
Will oil giants, including Saudi Arabia and the United Arab Emirates, increase oil production under US pressure? Will oil production increase? Will the price go down? Will this decision of the OPEC countries be favorable? Let’s see.
Strict restrictions have been imposed in various countries over the past year due to the spread of corona.
Due to this the demand for crude oil was badly affected. Due to this the last year also saw a sharp decline in prices.
Crude oil is needed
Meanwhile, the impact of the corona is now beginning to wane in many countries. India, especially the largest importer internationally, continues to decline. Thus the demand for crude oil has also recovered. But reduced production during the Corona period still persists.
Will production be reduced?
In the meantime, will OPEC countries, including Saudi Arabia and the United Arab Emirates, increase production in response to current US demand? The question arises. This is because the impact of corona is currently increasing in many countries, including France, Spain, Italy and China.
Fuel Vs Inflation
Fuel prices in the United States have risen to levels not currently seen in seven years. This triggers inflation. Meanwhile, US President Joe Biden has called on 23 countries to increase crude production.
Daily production of oil
The OPEC countries, led by Saudi Arabia and Russia, have now increased their daily production by 400,000 barrels per month. That should be enough. Masrooy, a senior official at the Abu Dhabi National Oil Company, said the oil supply would shift from deficit to surplus next year.
Crude oil prices may rise
With the OPEC bloc set to take place on December 2, crude oil prices are currently up about 60% a year, to more than $ 80 a barrel. It is expected to touch $ 100 in the coming months.
Will production increase?
In this situation, if OPEC countries increase production in line with US demand, it will be good not only for the US but also for India. But will the OPEC countries make such a decision? Let’s wait and see.
