Gulf States forced to rethink reforms due to lower crude prices
by ChemOrbis Editorial Team - content@chemorbis.com
According to local media sources, the relentless decreases on crude oil prices have caused widespread fear in the Gulf States. As a result of this development, Gulf State countries have started to mull over numerous savings measures because these countries’ deficits, depending largely on oil, have reached new highs as oil prices dropped by over 60% since summer of 2015.
In the United Arab Emirates and Kuwait, subsidies were reduced and fuel prices were raised. Saudi Arabia has withdrawn dozens of billions of dollars from its gold reserves and it is selling government bonds to cover its budget deficit.
According to these sources, the drop in oil prices hit Saudi Arabia the hardest. Saudi Arabia has a larger population than other gulf countries while they are at war with Yemen. These factors caused the burden to be heavier on Saudi Arabia. According to the International Monetary Fund (IMF), Saudi Arabia’s gold reserves are likely to last for another five years if the oil price remains at $50 per barrel.
In the United Arab Emirates and Kuwait, subsidies were reduced and fuel prices were raised. Saudi Arabia has withdrawn dozens of billions of dollars from its gold reserves and it is selling government bonds to cover its budget deficit.
According to these sources, the drop in oil prices hit Saudi Arabia the hardest. Saudi Arabia has a larger population than other gulf countries while they are at war with Yemen. These factors caused the burden to be heavier on Saudi Arabia. According to the International Monetary Fund (IMF), Saudi Arabia’s gold reserves are likely to last for another five years if the oil price remains at $50 per barrel.
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