Word: saudi
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...price slide. "Market stability is at the crossroads," admitted Subroto, Indonesia's Oil Minister and the current president of OPEC, at the start of the session. Yet the most that the ministers could agree on was minor adjustments like lowering OPEC's price for the heaviest grade of Saudi crude by a token 50?...
...appearance of a united front. No such accord could be reached last week. Instead, OPEC was forced to abide by majority rule, with Libya, Iran and Algeria going on record as opposed to the price cut. Nonetheless OPEC tried to look happy with what it had done. Was Saudi Arabian Oil Minister Ahmed Zaki Yamani pleased? "Yes, I am," he said. But he was uncharacteristically quiet, and he canceled his customary postsession news conference...
OPEC's troubles and the world oil glut are especially hitting Saudi Arabia, the organization's biggest and richest producer. Saudi output has dropped from a peak of 10.3 million bbl. per day in 1981 to 2 million bbl. per day in June, its lowest level in 20 years. Britain, a relative newcomer to the ranks of big-time producers with its North Sea fields, is pumping more oil than Saudi Arabia...
...Saudi economy has been severely squeezed by shrinking oil revenues. The kingdom currently earns only $37 billion annually from oil, vs. $100 billion four years ago. One result: its budget deficit for 1983 and 1984 totaled $22 billion. Its trade deficit is also large, $20 billion per year. So the Saudis have had to dip into foreign-exchange reserves, estimated at just under $100 billion, that were built up during the oil rush...
Another way the Saudis are trying to cope with their cash squeeze is by cutting government spending. This year's budget reduces military outlays 20%, to $17.8 billion, softening the Saudi market for U.S.-made weapons and stirring worry in the Pentagon over the kingdom's defense capability. Subsidies on food, electric power and gasoline are down 20%. The Riyadh government is also slashing money for new industrial projects. Two refineries worth $1.5 billion were canceled after 15% of the construction had been completed. Particularly hurt by the cutbacks are American and South Korean contractors who have been building...