Riyadh’s plan to raise $27bn from bond sales is a sign that its economic battle with United States is taking its toll
News this week that the Saudi government is to raise more than $27bn from bond sales is a sign that the strain of getting involved in a spending battle with the world’s biggest economy is taking its toll.
Saudi Arabia is an expensive country to run for the House of Saud. Fearful of Iran, it has imported the latest military kit to show that it is the Middle East’s regional superpower. Higher defence spending has also been needed to fund action in Yemen and to counter the threat from Islamic State.
In addition, Saudi Arabia has an unemployment problem that it fears may become a social unrest problem. Two-thirds of the population is under 30 and the unemployment rate for the 16-29 age group is 29%.
WNU Editor: The development of fracking technologies .... coupled with the beginning of oil exports from Iran .... is resulting in a situation where Saudi Arabia will lose market share as well as being faced with even lower prices for its crude. And while Saudi Arabia still has hundreds of billions in currency reserves .... it is now faced with the grim prospect that it has to learn to live within its means .... something that I suspect that many of its citizens are not ready to accept.
1 comment:
Lowering prices is a brute force approach.
Innovation and team work are not.
Which analysis (mine) leaves me about as thrilled as the plan do check cycle analysis I criticized a year ago.
At 1st blush when I saw the rig count fall 18 months ago I dreaded it and thought it would be like when the oil prices in Texas fell in the mid 1980s I truly expected people to point to Bakken and make their political bones. I have not heard that yet.
I hope Saudi Arabia's push will still hurt Iran. the Iranian's are getting 150 billion & will be able to sell oil easier (they always were to an extent, but how fast will they go through/ (squander ) it.
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