The rise in oil prices and the government's emergency plans to fight the coronavirus have harmed the overall budgets of the Gulf states and on average growth forecasts for the coming period, but the impact has varied from country to country. The dispute between Moscow and Riyadh focuses on oil prices, declining production, and divergent attitudes toward how to deal with US shale oil. This is evidence against the background of weak demand – which has waned since the start of the corona – and the low price of oil, which has already put pressure on the state budget of oil-producing countries. On the other hand, declining oil prices and the government's emergency plans to fight the coronavirus have harmed the overall budgets of the Gulf states and the average growth forecast for the coming period, but the impact has varied from country to country. This conflict is likely to lead to significant economic deterioration throughout the Middle East and may exacerbate growing geopolitical tensions in the Persian Gulf region. Overall, falling oil prices will drastically reduce oil and gas producers' incomes. Most of them have already faced a financial deficit, which is now deepening. In more than half of the countries in the region, the headline of the financial series, which indicates the price of oil needed to balance the government's budget, is more than double the current price of oil. The economic consequences of the price war are intertwined with the effects of the coronavirus. This is particularly damaging sectors of the Gulf economy that have seen progress in diversifying their economies. But when oil revenues are declining, these sectors have no way out. Several international banks have cut their forecast for GDP growth in the region from 0.2 percent last year to 0.4 percent in the Gulf Cooperation Council (GCC). Some Arab states in the Persian Gulf are in a better position to deal with a long period of falling oil prices than others. Kuwait and Qatar, for example, have relatively high per capita oil revenues, and governments in these countries can rely on significant financial reserves. But most countries now face deep challenges. The risks for Saudi Arabia as OPEC's top producer are higher. The country is struggling with a severe financial deficit and declining reserves (in 2014, Saudi Arabia's reserves were 48 percent higher than today). Riyadh has launched a price war and is likely to believe it can withstand the initial decline in revenue. But this oil policy, if it affects social spending, could have significant implications for Muhammad bin Salman's efforts to consolidate his power in the country, as well as Saudi Arabia's international position as a factor in the crisis. Saudi Arabia suffered the most after the fall of about 30 percent in oil prices and the suspension of the OPEC agreement to reduce production, especially since the situation continues to suffer hundreds of millions (dollars) a day. That put Saudi Arabia down about $ 13 billion (5 percent of the overall 2020 budget) from government spending. According to the Fitch International Financial Institution, Saudi Arabia needs to raise the price of a barrel of oil to $ 91 a barrel in 2020 so that it can balance its budget, and Saudi Arabia's budget deficit is projected to rise from 4.5 percent to 10 percent. For this reason, it can be said that the Saudi banking sector will not have the prospect of an interesting banking system with the deterioration of the banking environment. Besides, economic activity in Saudi Arabia can be predicted to slow down, and the instability caused by the Coronavirus will affect banks' capital and profits, and the case for strong financial support for banks will come under pressure. Because falling oil prices are an obstacle to the Saudi government's treasury. Consequently, this will lead to a gradual decline in the capital of the National Wealth Fund for two reasons. First, Saudi Arabia's reliance on the fund to reduce financial crises, and second, the reduction in oil prices reduces the profit margins that were the main source of these funds.
