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 $1 trillion economy, which surged almost 9% in 2022, helping Crown Prince Mohammed bin Salman 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 Russia’s invasion of Ukraine roiled energy markets.
With a global economic slowdown now weighing on crude demand, Riyadh 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% this year.
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