(Guest) The FT Story about Saudi Arabia is Misleading… Here are the Facts
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By: Dr. Anas Alhajji
The FT published a story this morning entitled: Saudi Arabia ready to abandon $100 crude target to take back market share
The story is misleading and doesn’t change any facts on the ground as we know them. It is a huge clickbait.
Details are posted below.
The FT Story is Misleading, Here is Why:
1- Saudi Arabia did not have a $100 price target. This is made up. There were media reports that Saudi Arabia needed $100 to balance the budget, but these were “theoretical” arguments. It was a great coincidence that we discussed this issue in the Daily Energy Report yesterday. Below is the text and the chart. The bottom line is that there was no price target of $100, hence there is nothing to abandon.
Summary
Saudi oil revenues have been tied to oil prices in recent years. Not surprisingly, revenues have declined as oil prices have fallen. Figure (1) shows trends in Saudi monthly oil revenues since the beginning of 2021. Data for August and September are EOA’s estimates. Any discussion of these revenues is meaningless without context as explained below.