After the fall in oil prices, Saudi companies cut spending.

Jin10 data reported on May 5th that, according to the Financial Times, following significant declines in oil prices triggered by geopolitical turmoil, Saudi businesses are seeking to diversify their operations and protect their businesses in preparation for the country’s economic slowdown. For a long time, Saudi Arabia’s economy has relied on government spending driven by energy exports, making it vulnerable to the boom and bust cycles influenced by fluctuations in crude oil prices. Recently, oil prices have fallen from over $80 a barrel in January to around $60 — the lowest level since 2021, well below Saudi Arabia’s breakeven price — forcing private enterprises to prepare for another economic downturn. A Saudi tech entrepreneur stated that after the big dump in oil prices in 2016, the government cut bonuses and benefits for public sector employees, forcing him to shut down his first business, which was a heavy lesson for him. This time, one of his companies is trying to reduce the number of government clients to avoid being affected and is expanding into new industries such as food and beverages.