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Saudi Arabia Faces Oil Crisis and May Delay Megaprojects of Vision 2030; Billion-Dollar Budget Already in the Red.
The Saudi Arabia is at a decisive moment. The second country with the largest reserves in the world, part of OPEC (Organization of the Petroleum Exporting Countries), is trying to maintain its strength in the global oil market while betting all its chips on the megaproject Vision 2030 to transform its economy.
But the bill is coming due. And it could be too high.
Billion-Dollar Deficit Threatens Saudi Arabia’s Plan
The Saudi government’s forecast for 2025 is concerning: deficit of US$ 26.9 billion. Even with an expected revenue of US$ 315 billion, expenses — closely tied to the Vision 2030 projects — will exceed US$ 342 billion, according to The Arab Weekly.
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As a result, Saudi Arabia needs to ensure that oil remains expensive in the international market. Otherwise, the fiscal gap could hinder plans to modernize the country.
A New Oil War May Be Forming
The position of Saudi Arabia as one of the leading countries in the oil sector is being challenged. According to The Wall Street Journal, OPEC has authorized the United Arab Emirates to increase barrel production in January 2025. Iraq and Kazakhstan also want more space.
Meanwhile, the United States, under the new presidency of Donald Trump, promises to be even more aggressive. Trump stated on November 6, during his victory speech, that the U.S. has “more liquid gold than any other country in the world. More than Saudi Arabia and more than Russia.”
Trump made it clear that he intends to force Europe to buy more gas and oil from the U.S. He also wants to open new areas for drilling by revoking environmental protections instituted by Biden.
If the plan succeeds, the oil market will become more competitive. And this is bad news for Saudi Arabia, which relies on high prices to finance the Vision 2030 project.
Vision 2030: Bold Plan for a New Country
The Vision 2030 project is Saudi Arabia’s big bet to break free from its reliance on oil. The plan includes the construction of futuristic cities such as The Line and the megaproject NEOM, which could cost over US$ 500 billion.
Additionally, Saudi Arabia will host global events such as:
- 2027 Asian Cup;
- 2029 Winter Asian Games;
- 2030 World Expo;
- 2034 FIFA World Cup;
All of this requires modern infrastructure and billions in investments.
Falling Market and Challenges with China
The external scenario is also pressing. The economy of China — Saudi Arabia’s largest customer — is slowing down. Moreover, the Chinese are heavily investing in green energy, which could reduce the demand for oil in the medium term.
Saudi Arabia is using its Public Investment Fund to finance part of Vision 2030. But without continuous revenue from oil, this strategy may have an expiration date.
The reliance on oil is still a reality. And that makes every decision by OPEC or the U.S. a threat to the success of Vision 2030.
“NEOM is a 50-Year Project,” Says Saudi Minister
Mohammed Al-Jadaan, Saudi Arabia’s Minister of Finance, was clear: “NEOM is a project for over 50 years. If anyone thinks the entire magnitude of NEOM will be built, operated, and start generating revenue in five years, they are being naive. And we are not naive, we are wise people. Some projects within NEOM will generate returns in the medium and short term, but this is a very long-term program.”
The government acknowledges that some projects will be delayed, but events like the Cup and the Expo 2030 remain a priority.
Saudi Arabia Between Two Worlds: Oil and Innovation
Saudi Arabia knows it can no longer rely solely on oil. The world is changing, and the energy revolution has already begun. Therefore, Vision 2030 is more than just a plan: it is a race against time.
Success will depend on balancing high oil prices and advancing in technology, tourism, and renewable energy sectors.
The risk is high. If the value of oil drops too much, Saudi Arabia could be forced to flood the market to maintain revenue, draining its own wells. This would compromise the future before Vision 2030 delivers results.
The world is watching. The question is: will Saudi Arabia be able to step out of the shadow of oil and enter a new era?
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