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Saudi Arabia is working to replace the use of petroleum liquids for power generation with solar energy and gas-fired capacity, Argaam reported on Monday, citing Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, as saying.
As part of the program ‘Hydrocarbon Demand Sustainability’, the world’s largest oil exporter will aim to replace petroleum—which it still burns for electricity—with solar power energy, Prince Abdulaziz bin Salman said at a meeting to describe the strategy of the Saudi energy ministry.
“The program will rank among the most important initiatives, given its value added to the national economy and its ability to stop the country’s financial waste,” Argaam noted.
Replacing petroleum with solar energy for electricity generation would free up more oil for OPEC’s top producer and de facto leader, Saudi Arabia, to export. This could potentially give the Kingdom even more sway on the global oil market and help it obtain more revenues from crude oil sales, despite constant assurances that the economic diversification away from oil is underway.
At the event on Monday, Prince Abdulaziz bin Salman also noted that Saudi Arabia made “strong efforts” to balance the oil market last year, according to Argaam.
Last year, Saudi Arabia went on a brief and ill-timed oil price war with Russia after the two friends/foes disagreed in March 2020 how to manage oil supply to the market at a time of collapsing demand in the pandemic. After Saudi Arabia and Russia returned to negotiations and sealed a new OPEC+ pact a month later, both leaders of the alliance had to cut their production much more than what they had discussed in March.
This quarter, global oil demand and the market are still wobbling due to the still spreading COVID, and Saudi Arabia abandoned, this time around, its insistence that everyone at OPEC+ take their share of the burden in rebalancing the market. The Kingdom announced a surprise unilateral cut of 1 million bpd of its crude oil production in February and March.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com