Oil’s slide and what it means for the Gulf

President Trump’s tariffs, retaliation by China, and OPEC+’s decision to accelerate the pace of oil output increases have caused the price of Brent crude to tumble to its lowest level in four years. If the Gulf states persist with the production plans set out yesterday, that will mechanically lift headline GDP growth due to higher output. But lower oil prices will push down overall oil export receipts. This will cause current account and budget positions to worsen and, for Saudi Arabia, Bahrain, and Oman, fiscal consolidation measures will need to be stepped up, weighing on activity in non-oil sectors.