Saudi Arabia is the world’s largest exporter of crude oil, however if things do not change it could well become a net importer by 2030 according to a new study by Citigroup, the international financial conglomerate.
According to the BP statistical review in 2011 Saudi Arabia produced 11.2 million barrels of oil a day, contributing 13% of the world’s total supply, more than any other nation. The problem is that a quarter of this production is used domestically to generate nearly half of the kingdom’s electricity each year.
Saudi Arabia already has a higher per capita consumption of oil than most other industrialised nations, and that consumption is growing at a rate of 8 percent a year. This led Citigroup to predict that “if Saudi Arabian oil consumption grows in line with peak power demand, the country could be a net oil importer by 2030.”
Crude oil sold in the domestic market is heavily subsidised. The countries power companies can buy oil at $5 to $15 a barrel to be used in power plants, and reducing the incentives to look at alternative sources of energy. Brent crude oil is currently traded on the international market at around $116 a barrel, which led Heidy Rehman, an analyst at Citigroup to state that “as a result of its subsidies we calculate ‘lost’ oil and gas revenues to Saudi Arabia in 2011 to be over $80 billion.”
By. James Burgess of Oilprice.com
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