Saudi Arabia

• [New] The Saudi Central Bank (SAMA) has published its plans to go live with open banking across Saudi Arabia by the first half of 2022.
• [New] The resulting increase in oil prices is set to create a chain reaction in the US, where shale operators will see cash from operations boosted by 32% in 2021, allowing for increased spending in 2021.
• Saudi Arabia aims to boost its renewable energy resources in its total energy share by producing nearly 9.5 GW of energy from sustainable energy sources by 2023, of which solar photovoltaic (PV) generation comprises a considerable portion.
• Saudi Arabia expects to post a deficit of 298 billion riyals ($79 billion) in 2020, or 12% of GDP, but expects it to fall in 2021 to 141 billion riyals ($37.6 billion), or 4.9% of GDP.
• On Saudi Arabia, GlobalData has cut its forecast for construction output growth to -2.8% from an earlier estimate of -1.8%, and expects a recovery for the sector of 3.3% in 2021.
• Germany will make a 1.5 million euro ($1.83 million) contribution to Thyssenkrupp's planned hydrogen electrolysis plant in Saudi Arabia, the second commitment this month under a broader national strategy to support hydrogen technology.
• The world's leading oil exporter, Saudi Arabia, is particularly vulnerable: A booming youth population and the need to create millions of jobs will require deficit spending of up to $100 billion per year, eroding reserves that could be exhausted within just a few years.
• The Houthis have threatened to continue to attack more oil facilities in Saudi Arabia and the UAE, if the Saudi-led coalition continues its military operation in Yemen.
• Saudi Arabia and several other members of OPEC are discussing the possibility of extending the current level of OPEC + production cuts to the end of the year, but Russia could be the stumbling block.
• The projected shortfall for 2021 will be the largest since 2017, when countries including Saudi Arabia and the United Arab Emirates severed diplomatic ties with Doha.
• Saudi Arabia expects to receive up to 25 billion riyals ($6.7 billion) in dividends in 2020 from its sovereign wealth fund, the Public Investment Fund, in a one-off measure aimed at boosting coffers battered by low oil prices.
• While the oil market speculates on whether OPEC + will ease its production cuts in January, rumors emerged on Thursday that the three biggest OPEC producers outside of Saudi Arabia may not be on board with extending the current cuts into next year.
• Two major regional protagonists are Saudi Arabia and Iran, both of whom are likely to arrive in early 2021 licking their wounds from a combination of low oil prices and the health and economic impacts of the COVID-19 pandemic, which hit Iran especially early and hard.
• The UK will become the Saudi Arabia of wind with enough offshore capacity to power every home by 2030.
• While assisting Russia, Saudi Arabia and the rest of the OPEC + group by hobbling US oil and gas production, a Biden administration will consider easing President Trump's maximum pressure sanctions on Iran.
• The sharp contraction of economic output in 2020, the uncertainty about how economic recovery will unfold, as well as the broad-based deterioration of key credit metrics such as debt ratios, fiscal and current accounts will weigh on the credit quality of Saudi Arabia.
• Saudi Arabia and other OPEC members are considering deepening oil production cuts amid rising Covid-19 cases in the West and fresh economic lockdowns in Europe that could curb oil demand further.
• Traders and refiners in Asia and Europe expect Saudi Arabia to cut its so-called official selling prices, or OSPs, for the first time since the OPEC + alliance agreed to reduce production in April.
• Prices have crashed in 2020 due to the Covid-19 shutdown, Saudi Arabia flooding the global oil market and, according to some analysts, investors' increasing wariness about the financial risk of backing fossil fuel assets.
• Saudi Arabia is aiming to install 57.5 GW of renewable capacity by 2030, spurring demand for new battery storage capacity in the Kingdom.
• Privatization of some Saudi state businesses, as well as public-private partnerships, could help raise capital and provide investment opportunities.

Last updated: 17 January 2021