A key word in this strategy is stability. Saudi Arabia, which holds about 17% of the world’s crude oil reserves, relies heavily on it for its economy, which accounts for nearly half of the country’s GDP. But oil prices have fluctuated wildly over the past few years, with oil futures turning negative for the first time ever in the early stages of the pandemic amid a sharp drop in demand. Earlier this year, oil prices recovered to above $120 a barrel amid limited supply capacity and soaring demand.
Most importantly, as climate change becomes a global concern, the question becomes, when will we see peak oil demand? 2022 is a record year as countries around the world strive to reduce carbon emissions and achieve energy independence. As a result, according to new research, the deployment of renewable energy and electric vehicles has hit a new record, and efforts are already underway to reduce emissions. In fact, renewable energy fully covers the increase in global electricity demand in the first half of 2022.
New policies in most major developed countries are paving the way for meaningful reductions in carbon dioxide emissions. Saudi Arabia is aware of this and therefore wants to diversify its economic interests while investing in the country’s future.