Saudi Beginning to Feel the Pinch

The good news for U.S. producers is that Saudi Arabia is also impacted by the lower price of oil. Oil has remained below $60 a barrel all 2015, and in the past 6 months Saudi has had to withdraw nearly $70 billion from global asset managers. 80% of Saudi Arabia’s budget is from oil production, “so when oil prices fall, it hits the economy especially if spending remains the same.” Saudi’s spending on things like the war in Yemen has increased. The International Monetary Fund recently predicted that Saudi Arabia will have a 2015 budget deficit of 20% of their gross national product.