Analysis: Saudi $7 trillion investment goal puts spotlight on oil prices – Reuters

SourceReuters
SectorEconomy
CountrySaudi Arabia

DUBAI (Reuters) - In order to wean Saudi Arabia off its dependency on crude the kingdom needs higher oil prices.FILE PHOTO: Flames are seen at the production facility of Saudi Aramco's Shaybah oilfield in the Empty Quarter, Saudi Arabia May 22, 2018. REUTERS/Ahmed Jadallah/File PhotoA multi-trillion dollar spending push designed to diversify the economy’s sources of income will require state companies to cut the dividends they pay the government to boost capital spending, Crown Prince Mohammed bin Salman has said.It is not clear how much companies like oil group Saudi Aramco - whose $75 billion dividends last year were vital to support state revenues - would cut their dividends, but any reduction would likely need to be compensated by higher oil prices, analysts say.“If dividends are lowered, a higher oil price would boost Aramco transfers to the sovereign through taxes and royalties instead,” Jean-Michel Saliba, MENA economist at Bank of America, said in a research note.This leaves crude...read more...