Oil price war, cost Saudi Arabia $12 Billion in one month!
Regardless of record oil exports in April as Saudi Arabia flooded the market with excess oil, the value of the Kingdom's crude exports plunged by US$ 12 billion from April 2019 levels as the most affordable oil costs in years struck earnings.
In April, the value of Saudi Arabia's oil exports plummeted by 65.4 percent, or by US$ 12 billion (45.3 billion Saudi riyals), dragging down the value of the overall product exports of the world's leading oil exporter, data from Saudi Arabia's General Authority of Statistics revealed on Thursday.
The worth of Saudi oil exports plunged by 23.5 percent compared to March, the stats workplace said.
The share of oil exports in total exports fell from 77.4 percent in April 2019 to 64.7 percent in April 2020.
China was Saudi Arabia's primary trading partner for merchandise trade in April 2020, with Saudi exports to China valued at US$ 1.9 billion (7.16 billion riyals).
Saudi Arabia made good on its pledge to flood the market with oil after the collapse of the previous OPEC+ deal in early March, exporting a record 10.237 million barrels each day (bpd) in April 2020, up from 7.391 million bpd in March, information from the Joint Organisations Data Initiative (JODI) revealed recently.
OPEC's biggest producer likewise saw oil export earnings fall in Q1 2020, by 21.9 percent to US$ 40 billion, when Brent Crude costs fell by as much as 60 percent.
Under the OPEC+ offer sealed in April, Saudi Arabia is reducing its oil production to 8.5 million bpd in May, June, and July, restricting exports to some consumers in Asia, and considerably cutting shipments to the United States. Even though oil rates are now higher than they were in April, lowered oil deliveries are set to continue impacting Saudi oil profits, a main income source for the Kingdom's budget plan.
Saudi Arabia's economy is set to shrink much more this year than initially expected, the International Monetary Fund (IMF) said previously today in an update of its forecasts from April. According to the IMF, the Saudi economy will crash by 6.8 percent this year, compared to a preliminary quote of a 2.3-percent decrease, as "interruptions due to the pandemic, along with substantially lower non reusable earnings for oil exporters after the significant fuel rate decrease, suggest sharp recessions" in Saudi Arabia along with in its key partner in the OPEC+ deal, Russia.