Saudi Says Crude Output Increases Elsewhere May Weigh on 2013 Income

Crude production increases by several producing nations may put downward pressure on global oil prices next year, which could hurt the fiscal surplus of top oil exporter Saudi Arabia , the kingdom's Finance Minister Ibrahim al-Assaf said Sunday.

The Gulf state disclosed Saturday a budget that projects total expenditures in 2013 of 820 billion Saudi riyals ($219 billion), maintaining the massive government-spending program it launched in the aftermath of the Arab Spring.

It will record a massive budget surplus of SAR386 billion in 2012 due to the buoyant oil revenue, but the surplus will fall to only SAR9 billion in 2013, which largely reflects the conservative forecasts for next year's oil revenue.

"The global economic conditions and the increase in production by some countries may have negative effects on prices and the level of production [in Saudi Arabia ]," Mr. Assaf told Dubai-based channel Al Arabiya.

"That's why it is better to be conservative," he said.

Saudi oil revenue is expected to reach SAR1.24 trillion this year, well above the levels predicted when the kingdom drew up its 2012 budget a year ago.

The Arab world's largest economy has maintained high oil output in the past couple of years as it has made up for disruptions to Libyan output in 2011 and more recently for the drop in Iran's oil exports due to international sanctions.