From a petroleum perspective, 2011 appears to have been a fantastic year for Saudi Arabia. The country’s oil production soared to over 10m bpd, piling up cash reserves and reducing government debt. Proud holder of the world’s largest proven oil reserves, highest exports, and most spare capacity, Saudi Arabia seems guaranteed the pre-eminent position in world oil markets that it has held for decades.
Yet throughout the past year, threats to the Kingdom’s power intensified. Disruptions in Libyan production cast doubt on Saudi Arabia’s spare-capacity reserves. Fractious OPEC meetings highlighted the Saudis’ increasing tensions with nuclear-armed Iran. Arab Spring uprisings stirred emotions among restive Saudi youth.
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