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WEEKLY NEWSLETTER
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Saudi Arabia
Index
Pipelines, Ras Tanura refinery
Courtesy Aramco World
Offshore pipelines, Ras Tanura
Courtesy Aramco World
Saudi Arabia is the world's most important oil producer.
Given its relatively high production levels, accounting for
nearly 13 percent of world output and 35 percent of total OPEC
output in 1991, and, more significantly, its small domestic
needs, the kingdom's dominance of international crude oil markets
is unchallenged. Although reluctant to play the role, Saudi
Arabia has become the "swing producer," balancing international
oil demand and supply. Therefore, within limits, Saudi oil
production policies can have a profound impact on international
prices. Since the early 1970s, the kingdom has occasionally used
this dominance to influence oil prices, usually to further its
objectives of sustaining long-term oil consumption and ensuring
economic stability in the industrialized world.
The oil sector is the key domestic production sector; oil
revenues constituted 73 percent of total budgetary revenues in
1991. Precise statistics for expenditures on sector development
were not available but some estimates placed the annual figure at
US$5 billion to US$7 billion, or less than 10 percent of total
budgetary expenditures. Export oil revenues accruing to Saudi
Aramco, a large portion of which is allocated to the budget,
accounted for 90 percent of total exports in 1991. Only in the
number of jobs was the oil sector relatively unimportant to the
economy; the capital-intensive nature of the oil industry
required few workers--less than 2 percent of the labor force in
the early 1990s.
Data as of December 1992
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