Saudi Arabia posts $33.5bn budget deficit amid drop in oil sales
Summary
Saudi Arabia reported a large budget deficit of $33.5 billion in the first three months of 2026 due to lower oil sales and higher government spending. The drop in oil revenue was linked to the halt of shipping through the Strait of Hormuz, a major route for global fuel shipments.Key Facts
- Saudi Arabia’s budget deficit reached 125.7 billion riyals ($33.5 billion) in early 2026.
- Oil revenues fell by 3% to 144.7 billion riyals due to reduced crude sales.
- Government spending rose 20% to 386.7 billion riyals, with big increases in economic resources, military, infrastructure, and transport.
- The deficit is more than twice the amount reported in the same period of 2025 and nearly 33% higher than the last quarter of 2025.
- Non-oil revenues increased by 2%, helping somewhat to offset the loss from oil sales.
- Saudi Arabia faced disrupted oil exports because maritime traffic stopped in the Strait of Hormuz, a key shipping passage for about 20% of the world’s fuel.
- The kingdom rerouted some exports through the Red Sea port of Yanbu using the East-West Pipeline.
- President Donald Trump suspended a U.S. military operation called “Project Freedom” aimed at reopening the Strait of Hormuz after less than two days, citing progress toward a peace deal with Iran.
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