The current oil slump has dealt a heavy blow to Saudi Arabia‘s economy, the analyst notes, adding that Riyadh has nothing but oil to rely on.”New projects like the lavish architectural creations looming in the deserts have halted, the Saudis are not happy people like they were,” Butler points out.

What makes matters even more complicated is that the Ghawar Field, the world’s largest oil field, is running out after about 65 years of continuous production and the Saudi Aramco is due to start the CO2-EOR process to extract the last of the field’s oil, the analyst stresses.

“Once this happens, Saudi Arabia will return to an almost medieval third world status. Either this or those billions horded by Saudi princes will have to be used to placate or to subdue the people,” he remarks.

And it’s not a mere speculation.

Back in 2012, an analytical report by Citigroup Inc. stated that Saudi Arabia risks becoming an oil importer by 2030.

“If Saudi Arabian oil consumption grows in line with peak power demand, the country could be a net oil importer by 2030,” Citigroup analyst Heidy Rehman wrote, as quoted by Bloomberg.

In light of the ongoing oil competition between US shale oil producers and Saudi crude extractors the prospect of Riyadh’s “running out of gas” looks real.”Furthermore, a recent WikiLeaks revelation cited a warning from a senior Saudi government oil executive telling that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels, or by nearly 40%!” the American political analyst underscores.

Butler refers to a phenomenon called “peak oil.” According to M. King Hubbert‘s theory, peak oil is the point in time when the maximum rate of extraction of petroleum is reached and the crude capacity will only decline.

Whether one likes it or not, peak oil has been reached, the analyst underscores.

However, while the global oil reserves are decreasing steadily, Riyadh has been pumping its crude faster than anyone.

And here is the root cause of Saudi Arabia’s warmongering. To maintain its status quo, the Saudi kingdom has established an alliance with Turkey, planning to seize Syria and Iraq’s oil fields.

Still, it’s only half the story, since the global economy also remains petroleum-centered.”Where Americans’ interests are concerned, while President Obama has been parlaying trendy terms like ‘renewable energy’ and his supposed climate change agenda, the fact is petroleum still powers 96% of all transportation in America,” Butler emphasizes.

To paraphrase the old song, oil makes the world go round…

The question then arises, whether we are on the doorstep of new “energy wars.”

7 Comments on "Is Saudi Arabia’s Oil Business Going Bust?"

James Tipper on Thu, 10th Mar 2016 6:32 pm 



Jesus, one article about “Who’s afraid of cheap oil?” bs about there being all this ability to produce. The next is one about Saudi Arabia going broke, can these analysts make up their mind, and just accept the doom and gloom already?

Pennsyguy on Thu, 10th Mar 2016 10:19 pm 



It may soon be “Twilight In The Desert”. The shade of Matthew Simmons will get the last laugh, as will M. King Hubbert. Those of us trying to cope with the end of useful oil may not be so happy.

theedrich on Fri, 11th Mar 2016 4:07 am 



The Saudi royalty has nothing to worry about.  Senator (and “war-hero”) John McCain will make sure Araby’s agents of Allah have all the weaponry they need to obliterate Yemen and maintain their local hegemony.  And if Ghawar and vicinity become less productive, he will nonetheless make sure the head-choppers in Riyadh keep Iran off balance by any means necessary.  After all, America’s strategy, there as elsewhere, is the ancient practice of divide-and-conquer.

Bob Owens on Fri, 11th Mar 2016 12:26 pm 



Of course SA is going bust. So is the world. Legacy oil fields are depleting somewhere between 3% to 6% a year. Projected forward 20 years, what will these fields be producing then? A lot closer to zero than they are today.The math is simple; time to stop dreaming.

shortonoil on Fri, 11th Mar 2016 3:41 pm 



“Of course SA is going bust. So is the world. Legacy oil fields are depleting somewhere between 3% to 6% a year.”

Things are likely worse than that. 1% of the world’s fields (the Giants) produce 50% of the world’s oil. They were the first to be discovered, and have been producing for the longest. Most of them are more than 60 years old. They have been on a plateau for the last 20 years. Ghawar is the largest of them, and one of the oldest. It is expected that when they go off their plateaus, which is likely to be this decade, that their decline rates could easily hit 14%, or more. Total world production is likely to see decline rates as large as 10%. The world’s economy would be squashed like a bug under foot.

Northwest Resident on Fri, 11th Mar 2016 7:21 pm 



“The world’s economy would be squashed like a bug under foot.”

Correction: The world’s economy IS BEING squashed like a bug under foot. Markets? Gone. Fundamentals? Gone. Accountability? Long gone.

The only thing keeping the global economy going these days is pure trickery combined with massive infusions of debt.

Of course, once the legacy oil fields to which shortonoil refers do begin their rapid inevitable declines, no amount of trickery or newly generated debt will be able to keep the illusion of “all is well” viable. That’s when everybody will realize that they’ve already been squashed like a bug under foot and there’s nothing left but the bleeding out and final realization of pain.

It’s going to get pretty messy!

Ben Grings on Mon, 6th Mar 2023 4:44 pm 



It’s interesting. I think if you put competent managers who will manage the business and attract investors, everything will only develop, especially since now there are many tools for business as https://wow24-7.io/virtual-assistant company that provides professional customer support services, a great choice for any business that strives to succeed in today’s world