Rising Oil Prices a Boon for Saudi Arabia's Economy - Bloomberg
Rising oil prices may be a deepening concern for most of the world, but it’s been a boon for Saudi Arabia’s economy and stock market.
The International Monetary Fund raised its estimate for the country’s economic growth by nearly three percentage points to 7.6%. The benchmark Tadawul All Share Index is the sixth best-performing gauge globally in 2022 and analysts say gains may not be over yet.
Russia’s war in Ukraine has pushed up fuel prices, the kingdom’s main source of income, to well above the level Saudi Arabia needs to balance its budget. As a result S&P Global Ratings has forecast the country will see its first surplus since 2013.
The rising prices however, have frustrated most of the rest of the world, particularly the U.S., in particular due to Saudi’s refusal to hike oil production. That has stoked tension already existing between the two. Saudi wants the U.S. to do more to counter missile attacks on the kingdom from Iran-backed Houthi rebels, and is wary of Washington’s attempts to revive a 2015 nuclear deal with Iran, its main regional rival.
The Saudis, however, have stressed that the relationship with the U.S. “is historic and remains strong.” And in what might be a complete turnaround for the region, Iran’s state-run Nour News reported that Iran and Saudi have resumed talks aimed at restoring ties to reduce regional tensions.
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