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Global Energy Advisory January 19, 2018

Global Energy Advisory January 19, 2018

The OPEC deal is looking…

James Burgess

James Burgess

James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…

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Saudi Arabia Could Become a Net Oil Importer by 2030

Saudi Arabia Could Become a Net Oil Importer by 2030

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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