Saudi Arabia has shifted back towards an oil policy of aggressively raising oil output to recapture market share and the Kingdom’s strong balance sheet means that it can “live with a prolonged period of low oil prices” as officials have suggested. Oil prices would probably have to fall a very long way and take oil export revenues below their nadir in 2016 before officials even thought about a U-turn on oil policy. Even then, a period of fiscal consolidation is likely to be the first port of call to make the necessary adjustment.
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