Are any of the regulars here willing to predict which countries will flip from net exporters to net importers over the next few years?
And does anybody who focuses on the supply side, as intended on this part of the site, consider the likely coming reduction in domestic consumption in countries such as S A, as solar power is used to offset domestic oil consumption as generating fuel?
It seems likely that Middle East exporters can save at least a million to two million barrels per day, by going solar, and earn a substantial profit by doing so, selling some or most of the oil they currently burn to generate electricity.
In terms of the big picture this might not be enough to really matter…….. a couple of million barrels per day isn’t all that much, considering world wide consumption and depletion, but it might turn out to matter a LOT, if it focuses the attention of the banking world.
We analyze the rapid growth of Saudi Arabia’s domestic oil consumption, a nine-fold increase in 40 years, to nearly 3 million barrels per day, about one-fourth of production. Such rapid growth in consumption – 5.7% annually, which is 37% faster than its income growth of 4.2% – will challenge Saudi Arabia’s ability to increase its oil exports, which are relied upon in long-term world oil projections by the International Energy Agency (IEA), US Department of Energy (DOE) and British Petroleum (BP). However, these institutions assume unprecedented slowdowns in Saudi oil consumption – from 5.7% annual growth historically to less than 2% in the future – allowing them to project increases in Saudi oil exports. Using 1971–2010 data, we estimate that the income responsiveness (elasticity) of oil consumption is at least 1.5—using both Ordinary Least Squares regression and Cointegration methods. We believe that continued high growth rates for domestic oil consumption are more likely than the dramatic slowdowns projected by IEA, DOE and BP. This will have major implications for Saudi production and export levels.
“The kingdom, which burns about 700,000 barrels per day of oil for electricity in the hottest months from May to August, has hiked the price of gasoline and electricity for its citizens in a bid to curb domestic use of crude so it can export more. ”
It sure as hell looks like the Saudi’s and a bunch of other nearby super hot and sunny exporting countries should be building solar farms flat out, considering the revenues they could be bringing in by selling the oil they are currently burning to produce electricity………. but maybe they either do have enough to burn it, literally, as they claim to, or maybe they believe that the market for it will gradually go away, and that they will never be able to sell all they have anyway.
When we start seeing articles prominently featured in the mainstream media about the Saudi’s and their neighbors actually contracting for solar farms on the grand scale, we can take it as more proof the peak is not that far off, or maybe even behind us, by that time.