Never let it be said that the Saudis aren’t doing their fair share to boost oil prices.
The last two meetings of the Organization of the Petroleum Exporting Countries ended in acrimony as members of the cartel failed to agree on a ceiling for exports or really about anything. Ditto for a wider meeting of oil producers this spring in Qatar where a freeze had been proposed.
But Saudi Arabia is pulling its weight, and then some, in the area of consumption. Naturally it could never be a member of the International Energy Agency, the rich consumers’ group formed in response to the Arab Oil Embargo, but it uses a tremendous amount of crude nonetheless.
Statistics just released by a Saudi agency show that exports fell to 7.44 million barrels a day in April, the lowest since last October, but production is a near-record 10.26 million barrels a day. The rest goes to fuel cars in one of the countries with the cheapest pump prices in the world, despite a recent cut in subsidies. That is no small feat given the fact that half the adult population isn’t allowed to drive. Oil is also used for generating electricity and, with daytime temperatures soon to be consistently above 110 degrees Fahrenheit in Riyadh, that consumes a lot of barrels.
Put it all together and Saudi Arabia, with barely 30 million people, is the world’s number five oil consumer. That is more than fellow oil exporters Brazil or Russia with 200 million and 145 million people, respectively. It is as much as industrialized Britain, Italy and Taiwan combined.
If Saudi Arabia ever got serious about making itself a normal economy, the result could be a lot more crude for the rest of the world.
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