Saudi Arabia expects oil revenue to jump by 46 percent next year after a deal between the kingdom and other producers to curb output drove up global prices.
The world’s top oil exporter expects to collect 480 billion riyals ($128 billion) from oil sales in 2017, compared with 329 billion this year, the Finance Ministry said in a budget statement Thursday. Non-oil revenue will climb 6.5 percent next year to 212 billion riyals, it said.
Oil prices have rallied since the Organization of Petroleum Exporting Countries, of which Saudi Arabia is the largest member, reached a deal with other producers to curb output next year. Benchmark Brent crude traded above $54 a barrel on Thursday, almost double its low in January.
“The oil revenue increase is in line with the expectations by the authorities that the market is rebalancing higher, and is clearly a sign that oil prices are expected to average $60 per barrel next year,” said John Sfakianakis, director of economic research at the Gulf Research Center.
The Saudi government relies heavily on oil sales for revenue and its finances have taken a blow since prices started tumbling in 2014. Total projected revenue this year, at 528 billion riyals, is less than half what it collected in 2013, when oil was trading above $100 and made up 90 percent of revenue.
The kingdom has implemented austerity measures this year to weather the downturn. In April, Deputy Crown Prince Mohammed bin Salman rolled out the Saudi Vision 2030, an economic plan to end the country’s “addiction” to oil. The government intends to spend 42 billion riyals on the program in 2017, up from 9 billion this year, the Finance Ministry said.