Saudi oil cuts throw last year’s standout economy into slow lane

Saudi oil cuts throw last year’s standout economy into slow lane

Saudi Arabia’s decision to extend its oil production cuts – part of a so far largely unsuccessful bid to raise prices – may trigger an economic contraction in what was the Group of 20’s fastest-growing country last year. It would be a stark turnaround for the $1tn economy, which surged almost 9 per cent in 2022, helping the kingdom invest tens of billions of dollars in everything from sports to tourism and new cities. The boom was propelled by record crude output of around 10.5 million barrels a day and prices averaging $100 a barrel as the conflict in Ukraine roiled energy markets. With a global economic slowdown now weighing on crude demand, Saudi Arabia is lowering output this month and next to just 9 million barrels a day, a level the kingdom’s rarely reached in the past decade. The move has lifted prices, but only slightly. Brent is trading around $78.50 a barrel, down almost 9 per cent this year. The slashing of supply will be a drag on the world’s biggest oil exporter. The economy will fall by 0.1 per cent this year if the government raises production in September and by 1 per cent if it holds