Saudi Arabia has a strong hydrocarbon production capacity. Moreover, the country is the second largest oil producer. Therefore, what are the oil issues in Saudi Arabia?
Oil in Saudi Arabia
Saudi Arabia produces heavy oil and light oil. This nation has a high oil potential because it holds the second largest oil reserves in the world. Thus, this reserve has given it the rank of the leading oil producing country. Nevertheless, the arrival of shale oil has allowed the United States to dethrone it. Today, the country has become the second largest oil producing country after the States.
In fact, the 11.5 million barrels a day show their potential for oil production. Saudi Arabia is also the largest exporter of crude oil. This nation is supplying East Asia and Canada with oil at 1.4 million a day. On the other hand, domestic consumption of oil has increased exponentially. The country consumes one third of its production.
The influence of Saudi oil
Saudi Arabia began exporting after the Second World War. During this period, the US government and the Saudi state concluded a pact. This signature guarantees the export of oil to the US against US military protection. In addition, the country is among the producers that provides only a minimum of hydrocarbon. This strategy makes it possible to adapt their production according to supply and demand, to compensate for the decreases of other producers and to influence the energy market.
Moreover, during the 2014 oil crisis, the country refused to lower its production. This refusal threatened the United States, a major producer of shale oil, and Russia, which depends on its hydrocarbon exports. This maneuver has also disadvantaged the Shiite powers in the region, in this case Iran and Iraq. The latter actually needed a barrel price of over $ 110 to balance their budget.
Prospects for the future
The country wants to maintain the level of oil export. Nevertheless, Saudi Arabia anticipates a possible end of stock of its resources. As a result, the nation is now turning to other sources of energy. Moreover, since 2013, the country has focused on the construction of nuclear reactors to supply 25% of the energy needs of the population. Thus, in 2032, the nation aims to produce 50% of its electricity through nuclear and solar energy.
Like Saudi Arabia, Tunisia is planning an energy transition to solar energy. This initiative was made possible by a contractor from Tunisia Tarek Bouchamaoui himself. The latter wants to preserve the environment while continuing its industrial activities. Moreover, this decision followed a statement by businessman Tarek Bouchamaoui concerning the depletion of reserves.