Saudi Arabia leads the world in oil production and exports. Its crude oil production costs are low, and its total crude oil production equals about 10.5 to 11.0 million barrels of oil per day. Saudi Arabia maintains that it is actually capable of producing more than that, up to 15 million barrels per day by the year 2020. However, many industry analysts have noted that there are often discrepancies between Saudi Arabia's actual production capabilities and the reserves claims that it reports. These experts highlight the fact that the prospect of running out of Saudi oil is not a far-off, unrealistic notion.25
World oil supply and consumption run about 84 to 85 million barrels per day, and Saudi Arabia fulfills more than 10 percent of this demand in the entire world. Oil export revenues, according to the EIA, account for as much as 90 percent of total Saudi export earnings and around 44 percent of Saudi Arabia's GDP.26 During 2004 and early 2005 Saudi Arabia pulled in massive oil export revenues as a result of high oil prices and increased exports. The country earned about $116 billion in net oil export revenues in 2004, and oil export revenues were expected to reach up to $154 billion in 2006 because of even higher oil prices.
Saudi Arabia exports the greatest portion of its oil to the United States, Europe, and Asia (which now receives about 60 percent of all Saudi oil exports). In the United States, Saudi Arabia is one of three top exporters of oil, supplying approximately 15 percent of U.S. oil in recent years. Saudi Arabia also holds one fifth of the world's proven oil reserves. With its robust oil supply and production capacity, Saudi Arabia has turned little attention to the development of alternative energy sources—so little attention, in fact, that less than 0.1 percent of Saudi Arabia's total energy consumption is derived from renewable sources.27 Saudi Arabia's arid environment also renders it unsuitable for renewable forms of energy such as hydroelectric power.
Was this article helpful?