A plunge in oil prices will ally with a sharp output cut to depress Saudi Arabia's oil income by nearly $147 billion (Dh539bn) in 2009, equivalent to the combined 2008 crude export earnings of the UAE and Kuwait, according to a key Saudi bank.

From a peak of $281.4bn in 2008, the Kingdom's oil revenues will dive to nearly $134.2bn in 2009 before rebounding to around $164bn in 2010, the Saudi American Bank (Samba) said in a study.

The projected income this year will be the lowest since 2005 as a result of a sharp fall in crude prices and a drop of more than one million barrels per day in the country's crude production in line with a collective Opec agreement to trim supplies to prevent prices from collapsing due to the global fiscal distress.

Samba estimated Saudi Arabia's actual oil production at around eight million bpd in 2009, nearly 1.2 million bpd lower than its output of 9.2 million bpd in 2008.

Despite the recent improvement in oil prices to around $70 a barrel, they have remained below half their peak level of $147 in late July last year.

The decline has combined with lower output to slash Saudi Arabia's crude export earnings to around $48bn in the first five months of 2009 compared with more than $100bn in the same period of 2008, according to the Energy Information Administration of the US Department of Energy.

Saudi Arabia, which controls more than a quarter of the world's recoverable oil deposits, has shouldered the brunt of Opec's output cuts of 4.2m bpd agreed on by the cartel's 12 members since September as the Kingdom pumps almost a third of the Opec's total production.

Samba's forecasts showed the plunge in oil exports would ally with higher imports to turn Saudi Arabia's massive current account surplus of $134.9bn in 2008 into a deficit of around $49.2bn in 2009. It expected the balance to remain in deficit albeit lower at around $38.8bn in 2010.

The report showed the sharp fall in average crude prices to around $50 a barrel this year from $95 in 2008 will depress the Kingdom's nominal GDP by $124bn to around $337.8bn from a record $461.8bn. It projected the GDP to recover to around $383bn in 2010.

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