Amid a boom with international oil prices topping $100 a barrel, Saudi Arabia, the world's largest crude exporter, is stepping away from its flagship soft power venture, "LIV Golf."
LIV Golf is a professional golf league that Saudi Arabia launched in 2022 to break the monopoly of the Professional Golfers' Association (PGA) Tour. Observers say the era of unlimited betting by Crown Prince Mohammed bin Salman, who had vowed to "shake the world order with money," has effectively come to an end.
According to major foreign media on the 29th (local time), the Public Investment Fund (PIF) has decided to halt funding for LIV Golf after the upcoming 2026 season. LIV is a startup league that Saudi Arabia launched by luring top PGA Tour golfers such as Bryson DeChambeau, Jon Rahm and Dustin Johnson with hefty signing bonuses. The PIF poured $5 billion (about 7.4 trillion won) into the league over four years since its launch.
Yasir Al-Rumayyan, the PIF governor who served as chair of the LIV Golf board, will step down. An independent board will handle subsequent league operations. The board plans to review strategic alternatives such as a sale or attracting outside investment to secure operating funds on its own. In the new five-year strategy report that the PIF released on the 15th, LIV was not mentioned even once. It is a signal that the PIF is likely to step away from LIV over the long term.
Tim Callen, a senior fellow at the Arab Gulf States Institute (AGSI), said in a Wall Street Journal interview, "This decision is a declaration that Saudi Arabia will no longer shoulder vanity projects."
In the new 2026–2030 strategy report the PIF released this month, Saudi Arabia is closing its wallet in a way that belies its nickname as the "big brother of the Gulf Cooperation Council." According to an analysis by the U.S. Energy Information Administration (EIA), the PIF's assets under management stood at $941.3 billion at the end of 2024, the world's fifth-largest among sovereign wealth funds. However, the PIF's cash holdings in 2024 fell to about $15 billion, a four-year low. Borrowing fund swelled to 570 billion riyals (about 232 trillion won). Net income also plunged 60% from a year earlier. The asset footprint is massive, but the structure leaves little dry powder to invest elsewhere.
The PIF plans to raise an additional $1.73 trillion in assets under management by 2030 to reach $2.67 trillion in assets in 2030. To do so, it has shifted its investment focus from pursuing hypergrowth to "sustainable value creation." It also reworked its asset mix. It will lower the share of overseas investments from the current roughly 30% to 20% and instead raise domestic investments in Saudi Arabia to 80%.
At a press conference on the 16th, Governor Al-Rumayyan said, "We will not approach all investments with the same priority. We will allocate capital according to timing and scale." In December 2024, the PIF's board already ordered across-the-board spending cuts of at least 20% at its roughly 100 portfolio corporations. Some projects saw budgets cut by 60%.
The cold wind did not stop at LIV. The Line, an architectural project touted as a symbol of the national economic plan "Vision 2030" and a signature ambition of Crown Prince bin Salman, also fell down the priority list. The Line is a linear new city in the middle of the northwestern Saudi desert with a mirrored facade, stretching 170 kilometers in length and rising 500 meters high. At the time of its announcement, the future city design with two facing mirrored walls drew global attention.
However, in an interview with Al Arabiya this month, Governor Al-Rumayyan expressed a negative view, saying, "I don't think The Line is absolutely necessary by 2030. It would be nice to have, but it's not essential." Construction on The Line has already been halted as of Sept. 16 last year. Of the planned 170 kilometers, only 2.4 kilometers have completed foundational work. In terms of progress, that is about 1.4%. The target number of residents was also reduced from the original 1.5 million to fewer than 300,000. Citing internal PIF audit materials, the Wall Street Journal estimated the completion date for The Line to be 2080. That means it would take 50 years longer than the initial 2030 target announced at the outset.
Soccer is no exception. The PIF sold a 70% equity stake in Al Hilal, a prestigious club in the Saudi Pro League, to private capital Kingdom Holding for 1.4 billion riyals (about $373.2 million). This year's government budget also cut expenditure by 21.2% in the local and urban services category and by 14.9% in transportation and infrastructure. It also pulled back from its U.S. stock portfolio. The PIF disclosed that it recently exited about $13 billion across 18 positions, including game maker Activision Blizzard, Inc. and cruise operator Carnival.
Saudi Arabia is reaping windfall profits as international oil prices surge due to the Middle East war and the blockade of the Strait of Hormuz. In an April report, the International Energy Agency (IEA) analyzed that as flows through Hormuz were choked, spot crude prices jumped by about $60 a barrel from before the outbreak of war. The International Monetary Fund (IMF) projects that Saudi Arabia balances its budget when oil is above $90 a barrel. Prices are currently above $118.
But from Saudi Arabia's perspective, the Middle East's geopolitical crisis is less a structural boom than a one-off war premium that could evaporate at any time. In reality, the kingdom's finances are mired in deficit regardless of rising oil prices. According to the 2026 budget drafted by the Saudi Ministry of Finance, this year's projected fiscal deficit amounts to 165 billion riyals (about 44 trillion won). The base dividends from Saudi Aramco, the state oil giant that had been the biggest domestic funding source for the PIF, were also cut by one-third.
On top of that, bills tied to the previously pursued Vision 2030 are set to arrive one after another. Expo 2030 is slated for 2030, and the Fédération Internationale de Football Association (FIFA) World Cup for 2034. Separate capital must be secured for building clean energy facilities, airport and aviation logistics, and advanced manufacturing on par with the United Arab Emirates (UAE), a rival Gulf state. In an interview with local outlet Al Arabiya, Governor Al-Rumayyan lamented, "From now on, we must bring in more external capital rather than rely on our own."
Experts expect Saudi Arabia to swiftly unwind flashy trophy asset holdings and global soft power expenditure and, for the time being, push aggressively for restructuring that channels capital into areas directly tied to domestic industry, jobs and infrastructure. The PIF said it contributed $243 billion to the non-oil institutional sector GDP from 2021 to 2024 to improve Saudi Arabia's oil-dependent economic structure. In the process, the kingdom's non-oil economic contribution rose by about 10 percentage points. Future investment direction is aligned with increasing this figure further. At the Future Investment Initiative (FII), which is under the PIF, Minister of Investment Khalid Al-Falih said, "Giga-projects have sucked up too many government resources."
Chatham House senior fellow Neil Quilliam said, "For Vision 2030 to run at full speed, Saudi Arabia needs to attract senior foreign executives and have global corporations establish a base in Riyadh, the Saudi capital, but that momentum has weakened." It is interpreted to mean that Saudi Arabia no longer has the capacity to push all projects simultaneously as before.