Saudi Arabia published its 2020 budget on 9 December, confirming the expected $50bn deficit set out in October’s pre-budget statement. Driven by a pessimistic 2020 oil market outlook, this is considerably higher than the finance ministry’s expected $35bn 2019 deficit.

The key driver is a sizeable $24bn cut in expected oil revenues, which are budgeted to fall to a three-year low of $137bn in 2020 (see table). MEES calculations suggest the budget is based on an oil price of just over $55/B, almost $10/B lower than the actual average price of $64.74/B for Saudi Arabia’s key Arab Light grade for the first 11 months of 2019. (CONTINUED - 1003 WORDS)