Saudi Budget Deficit Shrinks 75% in Q2 as Oil Revenues Surge

Key Facts

In a move reflecting fiscal resilience amid energy market volatility, Saudi Arabia's latest financial data shows a significant improvement in the Kingdom's budgetary position. According to reports, the quarterly budget deficit shrank by nearly three-quarters in the second quarter of 2026 to 34.3 billion riyals, down from 125.7 billion riyals in the first quarter. This contraction was primarily driven by a 28% quarter-on-quarter surge in oil revenues, as higher crude prices effectively offset lower export volumes.

On the expenditure side, government spending fell by 3.5% during the second quarter compared to the first quarter, further aiding the narrowing of the fiscal gap. These results come at a time when estimates suggest the Kingdom requires oil prices near $115 per barrel to balance its budget, up from $96 last year. Per market data, geopolitical tensions have supported price levels, with Brent crude trading near $90 per barrel, boosting state cash flows despite a 25% contraction in the oil sector due to supply disruptions.

Looking ahead, markets are monitoring the sustainability of these revenues as Saudi oil output remains below pre-crisis levels. As there are no major local economic catalysts in the upcoming calendar for the next seven days, global oil price movements will remain the primary driver for near-term fiscal outlooks.