Saudi Prince Alwaleed warns against oil prices slide warns 2015 budget could incur losses worth billions of riyals. (ArabianBusiness).
Saudi billionaire Prince Alwaleed bin Talal said the world's top oil exporter should start worrying about the recent slide in global oil prices and warned against the negative effect of such a drop on the state revenue.
In an open letter to Oil Minister Ali Al Naimi and other ministers, dated October 13, Prince Alwaleed said he was "astonished" about comments reportedly made by Naimi aiming "to alleviate the substantial negative implications on the Saudi budget and economy due to the big drop in oil prices".
Last week, Saudi officials briefed oil market participants in New York on the kingdom's policy, making clear that Saudi is prepared to tolerate a period of lower prices - perhaps as low as $80 a barrel - in order to retain market share, Reuters reported on Monday. The global oil benchmark has declined more than 20 percent from a 2014 high in June of $115 per barrel as supplies rose and demand slowed in the United States, Europe and China.
Prince Alwaleed has repeated previous warnings that the Gulf Arab kingdom needed to reduce its reliance on crude oil and diversify its revenues. He said in the letter, posted on his Twitter account on Monday, that the kingdom's budget this year and in 2015 could incur losses worth billions of riyals.
Owner of international investment firm Kingdom Holding, Prince Alwaleed is unusually outspoken for a top Saudi businessman. But his warning may reflect growing concern in private among many Saudis about the impact of declining oil prices on the country's economy and its dependence on oil revenues.
"Ninety percent of the 2014 budget is based on it (oil), so to underestimate (these implications) is in itself a disaster which cannot pass unnoticed," he wrote in the letter. Hmmm....The Saudi budget is based on prices above $ 95/Barrel, they can't keep such low prices long.Read the full story here.
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