A report by Citigroup has warned that Saudi Arabia could run out of oil to export by 2030, raising fears that oil prices may rise significantly in coming years.
A report by Citigroup has warned that Saudi Arabia could run out of oil to export by 2030, raising fears that oil prices may rise significantly in coming years.
The Kingdom is the world’s largest oil producer, accounting for about 13pc of global supply, but it may need to use a growing share of its production for power generation to meet rising electricity demand, Citi said.
Its export capacity could steadily reduce and, “if nothing changes, Saudi may have no available oil for export by 2030”, Citi analyst Heidy Rehman wrote.
Saudi Arabia consumes 25pc of its oil output and oil accounts for about 50pc of its electricity production. With peak power demand rising by about 8pc per year, the nation is aiming to more than double its power capacity by 2032 through new nuclear and solar instalations.
But Ms Rehman cast doubt on the nuclear plans, given problems of underinvestment, safety fears over “keeping reactors cool in the desert” and the risk of cost overruns.
If power demand were to grow as predicted and there were no change to the electricity fuel supply mix, “we estimate Saudi Arabia would be a net importer of oil by 2030,” she wrote.
She told The Daily Telegraph that any significant reduction in Saudi exports would impact on global oil prices.
But, with oil revenues also accounting for more than 80pc of its revenues, Saudi Arabia is “very aware of the fact that it needs to address this”.
Jeremy Leggett, convenor of the UK Industry Taskforce on Peak Oil and Energy Security, said the report had “huge” implications and that a decline in global oil production could cause “massive stress to the global economy”.
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