Saudi Arabia’s oil policy is facing internal and external challenges which could have a huge impact on its statute as a leader in the global oil market. Firstly, the kingdom is facing a significant shift in oil demand from the west (America and Europe) to east (Asia). Secondly, Saudi Arabia’s dominant role in the world oil supply could be altered by (a) large new unconventional oil reserves in North America. (b) Saudi Arabia’s place in the world oil market is threatened by unrestrained domestic fuel consumption. And, (c) increased Iraqi production with significant spare capacity could challenge Saudi Arabia’s dominance in OPEC, which we have seen small part of it in the last meeting of OPEC.
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