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Saudi Arabia has maintained a trade surplus since 1967 (when its trade statistics were first compiled in their current form). As the kingdom generates a majority of its revenue from petroleum exports, this surplus tends to rise and fall with the price and production of oil. After the oil embargo of 1973, when oil prices were high, the king-dom's trade surplus rose, increasing steadily until 1978. This trend continued after the Iranian revolution of 1979 when oil prices rose to new levels. Between 1978 and 1981 Saudi Arabia's trade surplus doubled, reaching a peak of US$82.5 billion.

Trade (expressed in billions of US$): Saudi Arabia Exports Imports
1975 29.682 4.213
1980 109.083 30.166
1985 27.481 23.622
1990 44.417 24.069
1995 50.040 28.091
1998 N/A N/A
SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999.

The surplus declined steadily throughout the 1980s as export volume diminished and oil prices fell. By 1985, the balance of trade had fallen to just US$7 billion. In 1990, Iraq invaded Kuwait, prompting the United Nations to place an embargo on Iraqi oil. The cut in supply sent prices back up, and as Saudi Arabia heightened production to meet world demand (from 5.1 million b/d in 1989 to 8.2 million b/d in 1991), export revenues increased and the trade surplus rose once again. In 1996, export revenues exceeded import expenditures by US$35.3 billion.

In 1998, the world economy slowed. At the same time, oil production by both OPEC and non-OPEC members increased. The higher production levels coupled with lowered demand caused the price of oil to fall by almost US$7/barrel, from US$19.12/barrel in 1997 to US$12.76/barrel in 1998. In Saudi Arabia, oil receipts fell and the trade surplus dropped to US$11.2 billion. In 1999, oil producers worldwide lowered production, and the...

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