We shall see. Though Saudi Arabia can produce Oil for approximately $15.00 their social programs are funded by oil and they amount to around $75.00 per barrel. These social programs must be maintained to avoid revolution and the overthrow of the royal family. from what I have read they need $90.00-$100.00 per barrel to not be dipping into their international reserves. The following article was when oil prices were in the $60.00+ range and the war in Yemen was not really going yet. At $20.00 the draw on reserves would be dramatically higher.
"In the meantime, Saudi Arabia is losing income, too, of course, and oil revenues account for 90% of the national budget.
It can live on savings for a while, but it needs a fairly quick win.
It would be politically unwise to cut the lavish government spending that keeps the Saudi population happy, and the Government is also involved in an expensive war in Yemen.
The missing income has mostly been replaced by withdrawals from the country's huge foreign reserves, estimated a year ago at $700 billion - but those reserves have fallen by $65 billion in the past year.
The Saudis don't want to run those reserves down too far: without them, it could not afford to play the role of ''swing producer'', and would lose most of its diplomatic clout."
AI
