“For Saudi Arabia, oil production and expenditure often change substantially and quickly. With considerable spare oil production capacity and a demonstrated policy of actively adjusting production depending on demand and supply conditions in the global market, oil production is more variable for a country that always produces at full capacity. Historically, government spending has also tended to increase as oil prices rise, meaning that the market and breakeven oil price often move together.”

Tim Callen, Visiting Fellow, AGSIW, The Breakeven Oil Price Is a Poor Guide to Saudi Arabia’s Fiscal and Oil Production Policies [Arab Gulf States Institute in Washington]