The oil market faces an unexpected turn: the threat to large exporters does not come from the capitals that lead electrification, such as Oslo or Shenzhen, but from the heart of the industry, Saudi Arabia. In a column published in Bloomberg Opinionanalyst David Fickling summarized it with a disturbing metaphor: “The murderer calls from within.”
Domestic appetite by crude is stopped. Since the beginning of the century, the consumption of oil in Saudi Arabia had shot. According to Bloombergdoubled to 2.3 million barrels per day, with between a quarter and a third destined to feed electric and fuel power plants to combat abrasive summers. However, this trend has begun to be reversed.
The official plan is to almost completely eliminate the burning of crude in electricity generation from here to 2030. As explained by Saudi Aramco, Amin Nasser, replacing that oil with renewables equivalent, in terms of export, to drill new wells. The International Energy Agency even warns that this change could represent the greatest drop in oil demand in the world in the next five years.
The commitment to renewables. Behind this turn is the massive deployment of solar energy. Fickling energy expert has pointed out That Acwa Power, the largest Saudi developer, plans to reach 78 renewable gigawatts in 2030, enough to cover all the electricity that the country generates today with oil.
Since 2024 It has already connected Almost 5 GW in new solar plants and has another 15 GW on the way. Logic is simple: in Saudi Arabia, solar electricity costs less than half than the conventional network. In addition, panels are easier to install than oil infrastructure, a land in which the kingdom was always strong. However, enthusiasm is not exempt from doubts. The Kpler consultant Calculate thatof the 130 GW announced by the Government, only 11.6 GW will really be online in 2030, which would prolong the use of crude oil in the electricity grid.
The Saudi impulse is not limited to the plot. The country You have already connected the battery system Storage, Bisha Bess (500 MW/2,000 MWh), operated by Saudi Electric Company with Byd Chinese technology. This allows to integrate intermittent renewables into the network and gives infrastructure flexibility. To this is added a plan to produce lithium in 2027 and uranium enrichment and enrichment projects To boost nuclear energy.
It clashes with megaprojects. This energy advance contrasts with vision problems 2030 in its most spectacular version. The Saudi Public Investment Fund cut 8,000 million dollars to the neom megaprojectquestioning the viability of initiatives such as The Line or the Trojena Ski Station.
A high -risk geopolitical play. The Saudi movement has implications beyond its energy balance. While the kingdom has driven OPEC+ to increase production in a saturated market, with the aim of pressing the American fracking and recovering market share. This has tensioned the seams of the poster: United Arab Emirates, Kazakhstan or Iraq produce above their installments, and Russia has shown an open disagreement with the Saudi strategy.
In the international market prices also suffer. According to ReutersSaudi Arabia could cut official sales prices (OSP) for Asia in October: Arab Light would be reduced between 40 and 70 cents per barrel, up to 2.50–2,80 dollars on the Oman/Dubai reference, and other degrees would fall between 40 and 60 cents. The combination of lower demand, abundance of Russian crude and a greater flow of American oil presses interest in Saudi crude.
The Saudi paradox. What seemed like the Achilles heel of Saudi Arabia – his voracious internal crude consumption – has become his most surprising strategic weapon. When betting on solar energy, battery storage and, to a lesser extent, the nuclear, the kingdom seeks to maintain its role as a dominant supplier in the global market.
But this same play threatens to undermine the OPEC foundations and enlarge a fiscal deficit that is already forcing to cut pharaonic projects such as Neom. Saudi Arabia Libra two battles at the same time: one to continue reigning in oil and another to reinvent itself in the post-hydrocarbons era. The open question is if you can win both.
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