- OPEC+ Accelerates Oil Output Increases by 411K Barrels/Day in May
- Saudi Arabia Needs $96.20 Oil to Break Even Due to Vision 2030 Spending
- Saudi Arabia Aims to Boost Non-Oil Revenue Through Manufacturing and Mining Investments
Recent developments in the oil market have seen OPEC+ countries announce an increase in oil output by 411,000 barrels per day in May. This move comes at a time when U.S. President Donald Trump’s tariffs have added to the volatility in oil markets. Prices for June delivery have shown a slight increase, with WTI trading at $63.32 per barrel and Brent at $60.12 per barrel.
Saudi Arabia, the leading producer in OPEC, is shifting its stance on oil production and is prepared to abandon its traditional role as the swing producer. This decision is driven by the need to address production-cut violators within the group. The country’s ambitious Vision 2030 plan, which requires an oil price of $96.20 per barrel to balance its budget, is also influencing this strategic shift.
Despite the challenges posed by lower oil prices, Saudi Arabia has the capacity to withstand market pressures. The country can adjust its economic plans, tap into reserves, or issue debt to mitigate financial risks. Additionally, Saudi Arabia is exploring opportunities to enhance its manufacturing sector and leverage low tariffs to become a regional manufacturing hub.
“As tariffs rise in certain countries, we are likely to see a growing shift of business to the GCC [Gulf Cooperation Council], whether through nearshoring or friendshoring,” – Adel Hamaizia
“Saudi Arabia should be sending their trade representatives to the Trump administration right now, asking, ‘What was China providing you. Tell us what it is and we will make it in Saudi Arabia and provide a great trade deal’,” – Ellen Wald
Furthermore, Saudi Arabia is accelerating its mining plans to diversify its economy and reduce dependence on oil. The country aims to optimize oil production, reduce carbon emissions, and enhance the mining industry’s contribution to GDP. With significant reserves of minerals like phosphate, , and bauxite, Saudi Arabia is poised to strengthen its mining sector and attract foreign investments.
Last year, the Kingdom signed key investment deals in metals and mining, signaling its commitment to building domestic supply chains and enhancing its global presence in the industry.