Mon | Sep 26, 2016

Saudi Arabia preparing for oil demand to peak

Published:Tuesday | February 16, 2010 | 12:00 AM

Saudi Arabia (AP):

A top Saudi energy official expressed serious concern Monday that world oil demand could peak in the next decade and said his country was preparing for that eventuality by diversifying its economic base.

Mohammed al-Sabban, lead climate-talks negotiator, said the country with the world's largest proven reserves of conventional crude is working to become the top exporter of energy, including alternative forms such as solar power.

Saudi Arabia was among the most vocal opponents of proposals during the climate-change talks in Copenhagen. al-Sabban criticised what he described as efforts by developed nations to adopt policies biased against oil producers through the imposition of taxes on refined petroleum products while offering huge subsidies for coal - a key industry for the United States.

Serious alarm

Al-Sabban said the potential that world oil demand had peaked, or would peak soon, was an "alarm that we need to take more seriously" as Saudi charts a course for greater economic diversification.

"We cannot stay put and say 'well, this is something that will happen anyway," al-Sabban said at the Jeddah Economic Forum. "The world cannot wait for us before we are forced to adapt to the reality of lower and lower oil revenues," he added later.

Some experts have argued that demand for oil, the chief export for Saudi Arabia and the vast majority of other Gulf Arab nations, has already peaked. Others say consumption will plateau soon, particularly in developed nations pushing for greater reliance on renewable energy sources.

With oil demand only now starting to pick up after it was pummelled by the global recession, some analysts say consumers may have learned to live permanently with a lower level of consumption.

The Organisation of the Petroleum Exporting Countries, as well as other international energy organisations, is forecasting a slight rise in oil demand this year, based mainly on increased consumption in Asia after last year's sharp hit.