Economic development and population growth are driving the need for more oil. Government energy subsidies, which keep the price of oil artificially low, have exacerbated the issue by encouraging a "culture of consumption." Saudi Arabia spends one-tenth of its gross domestic product, about $35 billion, on energy subsidies. But in the wake of the Arab Spring, the ruling al Saud family added almost $100 billion to the economy to reduce the cost of living. There have been no incentives to cut back.
Compared to last year, energy demands during peak hours increased by 10 percent, according to the Saudi deputy electricity minister. Another Saudi official reported that Saudi Electricity Co. burns 1.1 million barrels of crude oil at its power stations per day, and even more in summer.
Saudi Arabia, the world's leading crude oil exporter, currently produces about 12.5 million barrels a day. If left uncontrolled, Saudi officials say, domestic consumption would reach 3 million barrels of crude oil a day by 2028. But economists say that if the energy-consumption growth rate remains at 7 percent, the country will burn almost as much oil as it currently exports. More >>>
Location: Cayman Islands