Higher oil revenues push Saudi budget to Q3 surplus

Saudi Arabia recorded its first quarterly budget surplus for more than two years in the third quarter on the back of higher oil revenues, the ministry of finance said today.

The government budget saw a surplus of $1.8bn in the third quarter of this year, up from a deficit of $1.23bn in the previous quarter, and a deficit of $10.9bn in the corresponding quarter in 2020.

Oil revenues in the quarter stood at $39.46bn, up 60pc on the $24.7bn it generated in the third quarter last year, supported by higher oil prices and rising output as Saudi Arabia unwound its production cuts under the ongoing Opec+ deal.

Government oil revenues in the first nine months of 2021 came to $105.8bn, 25pc up on the $84.6bn it generated over the same period last year. The government's oil revenues consist of a roughly 98pc share of state-controlled Saudi Aramco's dividends — currently set at $75bn/yr — in addition to taxes and royalties.

For the first time in several years, the government did not publish a figure for expected oil revenues in this year's budget, reflecting the oil market uncertainties that it perceived. The Saudi government typically projects around 60pc of its income to come from oil revenues.

Aramco announced a third quarter profit today of $30.43bn.

Although the government budget saw a surplus in the third quarter, its overall expenditure in the first nine months of the year is $1.433bn higher than overall revenues of $185.7bn, keeping the budget in a slight deficit. But the cumulative deficit for the first three quarters is significantly below the annual deficit of $37.6bn projected in this year's budget, which indicates that the government budget could be very close to balance by the end of the year.

By Samira Kawar