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KHALEEJ TIMES, Tuesday, Feb 12, 2019 | Jamadi Al Thani 7, 1440

Saudi needs oil at $80-85 a barrel to balance its budget in 2019, says IMF

Saudi Arabia: Top oil exporter Saudi Arabia would need oil priced at $80-$85 a barrel to balance its budget this year, an International Monetary Fund official said.

Riyadh's breakeven oil price depends on several factors, including the level of oil production, how much of Saudi oil revenues are transferred to the budget, and how non-oil revenues perform this year.

"But if you take the (2019) budget as presented with everything remaining equal, a breakeven point would be around $80-$85 dollars," Jihad Azour, director of the IMF's Middle East and Central Asia department, told Reuters. Crude oil prices have dropped more than 30 per cent from a peak above $86 a barrel hit in October. Benchmark Brent crude was trading at around $62 a barrel on Monday.

Such price volatility has had an impact on the public finances and economic growth of all oil-exporting countries.

"It will not affect their ability to finance themselves, because when you look at Saudi, its (bond) spreads are very tight, but it has an effect on fiscal accounts," Azour said.

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