But a lot of others are pinning their hopes for the future of the industry precisely on shale. One July 2016 article from the Financial Times
citeda Wood Mackenzie forecast that, in the long run, about 60 percent of economically viable oil at price levels of US$60 a barrel lies in the U.S. shale formations, not in Saudi Arabia’s desert fields. Analysts are vocally praising the shale industry for its achievements in cost-cutting and efficiency enhancement, although the latter is also a point of contention with some attributing the “efficiency enhancement” to oilfield service providers’ discounts.
So, Saudi Arabia is pumping almost the cheapest oil in the world, yet the IMF projects that the kingdom requires oil prices of
$83 per barrel in order to balance its budget. This, of course, is because the Saudi budget relies very heavily on oil revenues. This year, oil will account for
69 percent of the budget revenue, or US$128 billion, up 46 percent from 2016. Total revenue for Saudi Arabia in 2017 is forecast at US$184.5 billion, while total expenditure is slated to rise to US$237.3 billion.
