Saudi Arabia posts $15bn surplus on soaring oil income

Saudi Arabia reported a SAR57.5bn ($15.3bn) budget surplus in the first quarter as officials kept spending restrained despite surging oil income.

Total government revenue was SAR278bn, 36 per cent more than the same quarter last year, while spending rose 4 per cent over the same period to SAR220.5bn.

Capital expenditures fell 1 per cent as the kingdom relies more on its sovereign wealth fund for projects and domestic investment.

The boost was mainly driven by oil revenue, which rose 58 per cent compared to last year, as oil prices surged and the kingdom gradually increased production.

Crude reached a high of $128 a barrel in the first quarter and averaged nearly $100 over the period.

The kingdom’s finance ministry has said that it will stick with spending plans for 2022 outlined in December’s budget announcement, using higher oil revenues for replenishing its reserves or transferring to one of its investment funds.

It wants to break a boom and bust cycle that has followed previous periods of high oil prices.

Earlier on Sunday, state oil giant Saudi Aramco posted its biggest profit since its record stock-market listing, after oil prices surged in the wake of Ukrainian crisis.

Oil markets are lifting Saudi Arabia’s fortunes again after the kingdom was hit hard by plummeting crude prices during the pandemic, giving officials greater geopolitical sway and more cash to spend at home and abroad.

The International Monetary Fund last month raised its estimate for Saudi Arabia’s economic growth by 3 percentage points.