Saudis brace for 'prolonged period' of low oil prices

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By Euronews
Saudis brace for 'prolonged period' of low oil prices

Saudi’s Arabia’s planned cuts in spending and energy subsidies show the world’s largest crude oil exporter is bracing for a prolonged period of low oil prices.

Analysts said applying a value-added tax as a way to rein in spending showed Riyadh was expecting lower revenues.

Oil prices are just under 40 dollars a barrel, well below the price needed for investers to consider more expensive sources of production such as shale oil or tight oil in North America to be attractive.

50 percent petrol price hike

Motorists queued to fill their cars on Monday night before higher fuel prices came into effect. A rise from 16 cents to 24 cents a litre showed an immediate impact of economic changes in the kingdom.

The Saudi government said its price hikes for fuel, water and electricity were part of politically sensitive subsidy reforms.