For the first time in 20 years, the value of Saudi Arabia’s oil exports plunged by 21.9% year on year in the first quarter to $40 billion as official data showed on Sunday. Brent Crude prices fell more than 60% in the quarter which is plagued from the ongoing pandemic and an oil price war between Saudi Arabia and Russia following the collapse of OPEC.
The General Authority of Statistics quoted that a decline in oil exports was the main reason behind a 20.7% price decline in the value of the overall product. It further quotes that non-oil exports fell 16.5%, which includes a combination of chemicals and plastics. China is the main destination for oil for the Saudi state, followed by Japan and India. China also serves as the main destination of Saudi Imports.
Brent crude, down 36% this year, has clawed back some of its losses and ended trading on Friday at more than $40 a barrel.
Saudi Arabia posted a budget deficit of $9 billion in the quarter as oil revenues fell by 24% totaling $34 billion. Following the recent results, Saudi made some of the biggest price increase for crude exports following the rise of prices over the last two decades. This steep jump in price will affect Saudi Aramco’s largest regional market, according to Bloomberg. Furthermore, the Saudi crude will erase almost all the discounts that the kingdom provides.
The sharp increase in price shows that the Saudi state is willing to use all of the tool in order to turn the oil prices after oil prices fell in the negative in a turn of the century event in the oil sector. As prices settle and stabilize in the Middle East, the oil kingdom will increase the official prices which will be followed by other producers.