S.A. sits on some of the "cheapest to extract" oil. But that doesn't help when your oil-dependent national budget is based on estimates of triple digit oil prices:
Quote:
The current budget predicts a $55-dollar barrel, but reaches a fiscal breakeven at a $98 barrel.
[...]
In January, Riyadh suspended the implementation of austerity measures in the first half of 2017 to ease financial burdens on a populace accustomed to heavy food and fuel subsidies. Source
|
S.A. is caught between an oily rock and a hard place: they want the price of oil to recover to support its finances, but they also want it unstable enough to discourage activity of more expensive production (eg. U.S. fracking & Canadian oil sands).