Saudi authorities have asked government agencies to submit proposals for budget cuts of at least 20% as part of the new austerity to cope with a sharp drop in oil prices, Reuters reported referring to its sources. 

According to them, the request was made over a week ago amid concerns about the coronavirus impact on the crude oil markets and ahead of OPEC deal’s collapse.

One of the sources told Reuters that when the budget requests were sent, Saudi officials had been anticipating difficult talks with Russia on the need for deeper output curbs to stabilize markets. Moscow did reject the proposal, triggering a war for market share between the two states which has sent crude prices plummeting.

According to four sources, the Saudi finance ministry has instructed government agencies to submit proposals to cut the 2020 budget by 20-30%.

The MFA has already implemented a 20% reduction, one source said, adding that the reduction will not affect wages, but projects may be delayed.

Saudi Arabia, the OPEC actual leader, and the world's largest oil exporter, is dependent on oil revenues. The International Monetary Fund said Riyadh needs oil at $ 80 a barrel to balance the 2020 budget, with a deficit of 187 billion riyals ($ 50 billion).