20240814
🔸 Many believe that Saudi Arabia's push to diversify its economy away from oil stems from fears of depleting reserves or declining demand. This is far from the truth. Oil remains profitable and will be in demand for a long time. Saudi Arabia isn’t moving away from oil; it’s focusing on maximizing its value.
🔸 While renewable energy sources have entered the competition, oil's global importance cannot be underestimated in the foreseeable future. With increasing demand, production isn’t keeping pace. Here are some key points:
🔸 Saudi Arabia is not just increasing its crude oil production but is also enhancing its downstream industries. Saudi Aramco’s programs aim to convert 3 million barrels of crude oil into higher-value products by 2030, significantly increasing the added value of oil. This strategy ensures substantial economic growth while strengthening Saudi Arabia’s key position as an oil and derivatives supplier.
🔸 Additionally, Saudi Arabia is warning about the potential consequences of underinvestment in the oil sector, believing it won’t be able to meet the growing global demand for oil alone in the future. This warning comes amid increasing pressure on producers to invest in alternative energies.
🔸 The country’s active exploration and significant investments in new oil fields reinforce the idea that Saudi Arabia is confident in the ongoing demand for oil.
🔸 Furthermore, the International Energy Agency (IEA) predicts that global oil demand will exceed 105 million barrels per day by 2030, reinforcing the continued importance of oil as a primary energy source.
🔸 Reports suggest that U.S. oil production may sharply decline over the next decade due to environmental challenges, regulatory pressures, and rising costs. This decline will enhance the role of major producers like Saudi Arabia in meeting the growing global demand. Moreover, it is anticipated that Russia’s oil exports could reduce to just 2 million barrels per day over the next decade due to escalating costs and production challenges.
🔸 Lastly, it's crucial to note that oil has always been profitable for Saudi Arabia. The country’s economic diversification isn’t driven by fears of oil depletion or declining demand but by a comprehensive vision for sustainable and diversified economic growth.