Saudi assets set to surpass $1trn in 2015

Strong oil prices and higher crude production will boost Saudi Arabia’s net foreign assets by nearly $166 billion in 2012 and the funds are set to surpass $one trillion in 2015 for the first time in the Gulf Kingdom’s history. 

Figures by the International Monetary Fund (IMF) showed high oil prices and output already boosted the foreign assets of the world’s dominant oil power by around $94 billion in 2011 to reach a record high of around $535 billion.

The assets are projected to climb to $701 billion at the end of 2012 and continued their growth to reach $843 billion at the end of 2013 and $953 billion at the end of 2014. The IMF projected the assets, controlled by the Saudi Arabian Monetary Agency (SAMA), central bank, to smash the $one trillion barrier for the first time to peak at an all time high of $1,058 trillion at the end of 2015.

It expected the assets to further swell to $1,128 trillion at the end of 2016 and break another record of $1,213 trillion at the end of 2017. 

The Washington-based IMF made its forecasts on the basis of a price of Saudi crude of around $109 a barrel in 2012 and around $105 in 2013.

It projected the price to slip to nearly $98.5 in 2014 and continue to edge down slightly to about $93 in 2015, around $89.5 in 2016 and $87.2 in 2017. 

The Kingdom’s crude output is also forecast to remain as high as 10.1 million barrels per day in 2012-2014 before climbing to new highs of about $10.3 million bpd and 10.5 million bpd in 2015 and 10.5 million bpd in 2016. The IMF expected output to swell further to 10.7 million bpd in 2017. 

The report showed high prices and output would boost Saudi Arabia’s actual oil revenue to as high as SR1,162 billion in 2012 compared with budgeted SR621 billion. The income is projected to remain as high as SR1,107 billion in 2013 and around SR1,030 billion in 2014 before going below SRone trillion in 2017. 

After sharp falls in late 1990s, SAMA’s assets began their rapid rise in the following years because of high oil prices and a surge in the country’s crude output. The year 2009 was an exception as they dipped by nearly SR130 billion following a decline in oil prices and production coupled with high spending as part of the government’s post-crisis fiscal stimulus measures. 

In 2011, the assets leaped by about SR352 billion as a result of high oil prices and a sharp rise in the Kingdom’s crude output to an average 9.3 million barrels per day from around 8.2 million bpd, an increase of 1.1million bpd. 

It was the biggest annual increase in the assets since 2008, when they rocketed by a whopping SR513 billion mainly because of a 50 per cent rise in crude prices that allowed the country to record its highest fiscal surplus of SR580 billion.


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