The End of the Saudi Oil Reserve Margin

[phantom power]

t’s a familiar scenario: At one time or another, the Saudis have been called upon to replace exports from Iran, Iraq, Kuwait and, most recently, Libya. The idea is to have your cake and eat it—to meet U.S. foreign policy goals without disrupting oil markets and antagonizing the American motorist.

But the old playbook may have to be torn up. This time Saudi Arabia is struggling to assume its usual role as the oil market’s swing supplier. This can be seen in current market tightness and in U.S. gasoline prices, which are edging toward $4, a dangerous prospect at election time.

...

Saudi Arabia isn’t the same depopulated petro-state that the West found itself so dependent on in the 1970s. The kingdom and its oil-rich neighbors have seen their populations and industrial bases swell. They have become huge consumers of their own energy. The ruling sheikhs have cemented themselves in power by erecting energy-driven welfare states which provide some of the world’s cheapest electricity, natural gas and gasoline.

With domestic electricity demand rising 10% per year in Saudi Arabia, the kingdom now devours more than a quarter of its oil production—nearly three million barrels per day. International Energy Agency figures show that Saudi Arabia now consumes more oil than Germany, an industrialized country with triple the population and an economy nearly five times as large.

http://saudiinfocus.com/en/wall-street-journal/the-end-of-the-saudi-oil-reserve-margin

[NickB79]

1. Ah, the Land Export Model strikes yet again

This is looking to be a clusterfuck on an immense scale. No wonder countries are afraid to act on Iran's nuclear program.

[Indydem]

2. I look at SA unwillingness to pump oil a bit differently

"You are not a Bush, I will not help you."

[bongbong]

3. What?

> With domestic electricity demand rising 10% per year in Saudi Arabia, the kingdom now devours more than a quarter of its oil production

They must be trying to air-condition the desert, since their industrial use is trivial.

[Javaman]

4. basically, it's the fact that natural born Saudi's

have special status in that nation, especially the males. As a result most if not all the actual work in the country gets done by foreign nationals. So when you combine a rising population of a privileged class and a rising population of workers, the energy consumption increases as the wealthy demand more services.

What's happening in Saudi Arabia is similar in some ways to the era prior to the French revolution. where there was a top heavy ruling class of royals that were taxing the living daylights out of the middle and lower class to support their lavish lifestyles.

only instead of taxes, they are using oil to keep the royals in clover.

It won't last much longer and when there is a revolution/civil war in Saudi Arabia, it will make Syria look like a walk in the park, because we will be involved by siding with the royals against the people so we still can keep the oil flowing.

To Quote Dune: The spice must flow.