Interesting is it not – that Saudi Arabia is practically bankrupt – yes the State has a huge problem – and whilst the Royal family – The House of Saud – has control of a huge Sovereign Wealth Fund – they may consider this ‘theirs’ – and not the States.
If anything can go – wrong it will go wrong.
The war in Yemen costs a lot of money – in addition the funding of ISIS and Al Nusra drains available capital.
Basically the whole State of Saudi Arabia are dependent on the Royal family for income – plus subsidized fuel – the latter having been suspended.
Rating Agencies have downgraded the major Banks and the State – due to their debt.
The House of Saud – in 2015 – had proposed to float their oil company Saudi Aramco – to raise much needed cashflow.
Then we have a price increase by the company – in Asia and the U.S. having – due to apparent ‘demand’ – and this during a deflationary trend.
It appears they are not aware that Iran has a very large number of tankers going through to Asia – or they desperately need revenue on existing contracts.
Then on top of that the U.S. – now a major oil producer – has started production again – the current price being more than satisfactory to make a profit.
Oh and Russia – yes – cheap oil through to China.
So good luck on increased income from existing contracts.
As the Telegraph U.K. reports
Saudi Arabia has lifted the price of its crude exports to the US and Asia by less than expected, and deepened cuts for European buyers, in a bid to balance the Kingdom’s need to boost oil revenue while keeping a grip on its dominant market share.
The world’s largest crude exporter more than doubled the price it charges Asian customers on top of the regional oil market price, lifting exports by 35 cents a barrel to 60 cents, in its second consecutive monthly price increase. But the state-backed Saudi Aramco stopped short of the 50 cent a barrel hike expected by the market in a move that analysts said was a defensive play to stop it losing market share.
For US buyers the price of Saudi crude has increased by 20 cents a barrel, to 55 cents, on top of the regional benchmark price. Meanwhile, customers in North West Europe will receive a 35 cents a barrel price cut.