Saudi Deficit Could Narrow As Conflict Drives Oil Price Surge

20 Mar 2026 Issue: 69 / 12 By: Yesar Al-Maleki

Saudi oil exports have been curtailed by the Strait of Hormuz closure, but if Aramco is successful in exporting 5mn b/d from its Red Sea coast, oil revenues could rise above pre-conflict levels. There is a growing expectation that the budget deficit could be smaller than initially expected.

The Middle East conflict has huge economic consequences for the Gulf states overwhelmingly reliant on hydrocarbon exports. Oman, situated outside the Strait of Hormuz – now effectively closed to non-Iranian exports – is in the strongest financial position as it can fully capitalize on high oil prices. The countries most impacted are Iraq, Kuwait, Qatar and Bahrain which have no functioning bypass options. In the middle sit Saudi Arabia and the UAE, which have had to cut production and exports but are generating huge revenues from the barrels they are able to sell.

Aramco plans to export 5mn b/d of crude oil from Yanbu, on the Red Sea coast, which is equivalent to around 70% of pre-conflict levels (MEES, 13 March). Initial indications are that Yanbu exports are rising steadily although they remain some way off of reaching planned levels (MEES, 20 March). (CONTINUED - 789 WORDS)