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On the 28th of December, 2015, Saudi Arabia published its 2016 budget. The budget showed a decline in spending by 16% down from 2015 and amounting to $36 bn. When this reduction in government spending is added to their declared $98 bn deficit, we come to a realistic budget deficit of $134 bn which is not far off from the International Monetary Fund’s (IMF) projection of $140 bn or 20% of GDP. The budget shows just how much the global crude oil glut is affecting the finances of the OPEC kingpin. The new budget was based on an oil price of $50/barrel in 2016 but an OPEC study projected that oil prices could range from $30-$40/barrel.
The Saudi budget showed that the country’s earnings in 2016 are forecast at $137 bn, $25 bn down from 2015 against a spending of $224 bn. However, it is believed that the fall in government expenditure will be sharper than implied in the budget.
The climate risk playing field is changing rapidly for the oil and gas industry. Methane emissions management was previously a niche or emergent issue for investors and companies alike; however, only one business week into 2016, developments suggest it is becoming a mainstream issue that is capturing increasing public, investor and environmental advocacy attention.
One year after the enthronization of King Salman, Saudi Arabia has enhanced its role as a center stage player not only on the global oil market but also throughout the Middle East. The modulations of Saudi’s regional foreign policy are monitored and scrutinized with more zeal and apprehension than the behavior of other main players, including the US, Russia, Iran, Israel, and even the increasingly unpredictable Turkey.
That is due to a number of overlapping factors, not fully positive for Riyadh. Saudi Arabia kick started a chain of crucial events in Libya, Yemen, Syria, etc. which did not evolve in the desired direction.