Saudi Arabia Will Have to Improve Energy Efficiency Amidst Declining Oil Exports

Saudi Arabia Will Have to Improve Energy Efficiency Amidst Declining Oil Exports

Summary

Saudi Arabia’s economy is heavily dependent on its crude oil exports which account for about 90% of the country’s export earnings and over 70% of its budgetary revenue. Over the last decade, Saudi Arabia has witnessed a sharp increase in its domestic oil consumption, which has adversely affected its oil exports. Declining oil exports has become a cause of concern for Saudi Arabia as its economic performance depends very heavily on its crude oil exports. Besides this, the budgetary expenditure commitments of the country have been increasing especially towards education, heath, social and infrastructure development. With increasing expenditure and decreasing oil exports, the kingdom may face fiscal challenges especially if there is a fall in global oil prices. To counter the possible implications of declining oil exports on its economy, Saudi Arabia will have to either increase its oil production or control domestic oil consumption - especially when it suffers with serious inefficiencies in energy usage. Increasing oil production may not be a possibility considering its recent inability to convince OPEC to increase production quotas. In these circumstances, improving energy use efficiency is imperative for Saudi Arabia to offset the impact of declining oil exports on its economy.

Scope

• The report highlights possible economic challenges that Saudi Arabia may face due to its decreasing oil exports
• It provides analysis of possible solutions for the Kingdom to check its decreasing oil exports
• It also presents the steps the kingdom has taken in the recent past to control inefficient energy usage domestically

Reasons to buy

• To keep abreast of recent trends in oil production, consumption and exports in Saudi Arabia
• To gain understanding of the background in which Saudi Arabia has been trying to convince OPEC to increase oil production quotas
• To gain understanding of expected future trends in power generation mix and energy usage in the kingdom