Opinion

What should be the minimum price per barrel of crude for Saudi Arabia in order for them to maintain subsidies to its population and to take care of the thousands of princes and princesses?

IMF and Bloomberg estimate Saudi Arabia’s breakeven oil price between $90–$112, as the kingdom balances budget demands, Vision 2030 goals, and OPEC+ production cuts

Team PGurus

November 5, 2025

The real cost of Saudi Arabia’s oil dependence

Saudi Arabia: Breakeven oil price

The oil price Saudi Arabia needs to achieve to fully fund its budget is called the Fiscal Breakeven Oil Price. This figure changes annually based on government spending plans and non-oil revenues.

Here are the key estimates for the price per barrel needed to balance the budget, covering all expenditures, including public services, subsidies, and the costs associated with the vast royal family and ongoing economic diversification projects (like Neom):

Why the high price?

The high breakeven price is necessary for several reasons:

Social Contract: To maintain stability, the government provides extensive subsidies (fuel, water, electricity), high-paying public sector jobs, and housing support to the Saudi population.
Vision 2030: The Kingdom is heavily investing in diversifying its economy away from oil, necessitating substantial spending on futuristic projects likeNeom, which increases the required revenue.
Oil Production Cuts: Saudi Arabia has often cut its oil production as part of OPEC+ agreements to support prices. While this raises the price, it reduces the total volume sold, meaning a higher price is needed for each barrel to cover the budget gap.

In summary, while the core budget might be covered in the $90s, meeting all the ambitious investment goals and maintaining the current spending pace likely requires oil prices closer to $100 to $112 per barrel.

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Team PGurus

We are a team of focused individuals with expertise in at least one of the following fields viz. Journalism, Technology, Economics, Politics, Sports & Business. We are factual, accurate and unbiased.

1 COMMENT

sreeram November 5, 2025 At 5:53 PM

Totally illogica at arriving at fuel prize. India can set similar prize for its spices & other products include pharmacy to include costs of next 50 years & charge importing countries today
It is Middle East country problems to cut or source separately for its futuristic projects & not demand it as its birth right when selling crude oil.
The cost of doing business in UAE is too high. Rest is all hype that it is gold on the streets of Dubai or Abu Dhabi. Total Hype & nonsense, selling dreams but factually nothing on ground.