Saudi Finances Supported by Oil Above $100, But Infrastructure Attacks and PIF Liquidity Raise Concerns

Saudi Arabia continues to reap the benefits of rising oil prices, as Brent crude remaining above the $100 per barrel mark strengthens the public budget and gives the government ample fiscal leeway to fund Vision 2030 megaprojects without the need to increase borrowing.

However, analysts reportedly point to serious risks along this path, most notably the vulnerability of oil infrastructure to potential attacks, especially after the experience of the 2019 Aramco attacks, which demonstrated how susceptible vital facilities are to disruption and their immediate impact on global supplies.

The second concern revolves around the actual liquidity available to the Public Investment Fund, the kingdom's main investment arm, amid massive commitments that combine international investments and the funding of domestic projects such as NEOM and Qiddiya, raising questions about the fund's ability to provide quick liquidity when needed.

Credit rating agencies maintain a positive outlook on Saudi finances as long as oil remains above $80, but they warn that any sudden price drop or major security incidents could quickly redraw the landscape and narrow the fiscal room for maneuver currently enjoyed by Saudi decision-makers.

What do these terms mean?

Public Investment Fund (PIF): The sovereign wealth fund of Saudi Arabia that invests public money in companies and assets inside and outside the kingdom, and is considered one of the largest sovereign wealth funds globally.

Financial Liquidity: The ability of the government or fund to gain quick access to the cash needed to meet obligations and spending without the need to sell assets or borrow under high terms.