Energy in Saudi Arabia involves petroleum and natural gas production, consumption, and exports, and electricity production. Saudi Arabia is the world's leading oil producer and exporter. Saudi Arabia's economy is petroleum-based; oil accounts for 90% of the country's exports and nearly 75% of government revenue. The oil industry produces about 45% of Saudi Arabia's gross domestic product, against 40% from the private sector. Saudi Arabia has per capita GDP of $20,700. The economy is still very dependent on oil despite diversification, in particular in the petrochemical sector.
For many years the Kingdom of Saudi Arabia has been the world's largest petroleum producer and exporter. In 2011 it pumped about per day of petroleum. While most of this is exported, domestic use is rapidly increasing, primarily for electricity production. Saudi Arabia also has the largest, or one of the largest, proven crude oil reserves (i.e. oil that is economically recoverableVenezuela has more oil in the form of tar sands, heavy bitumen which is not currently economically competitive.) in the world (18% of global reserves, over ).
Saudi Arabia has one of the largest reserves of natural gas in the Persian Gulf. Proven natural gas reserves are over . Global production in 2009 reached of oil and of natural gas.2011 report on oil and gas companies, Promoting revenue Transparency Transparency International 2011 page reserves 114–115 but due to its sizeable domestic gas markets, is "unlikely to become LNG exporters anytime soon". Saudi Arabia is prioritising upstream gas investment, but for use in the domestic power generation market, not for export.
The country has had plans to diversify its energy sources for some time, developing solar and nuclear power.
Energy in Saudi ArabiaIEA Key World Energy Statistics Statistics 2015 , 2014 (2012R as in November 2015 + 2012 as in March 2014 is comparable to previous years statistical calculation criteria, 2013 , 2012 , 2011 , 2010 , 2009 , 2006 IEA October, crude oil p.11, coal p. 13 gas p. 15 Capita Prim. energy Production Export Electricity CO2-emission Million TWh TWh TWh TWh Mt 2004 24.0 1,633 6,469 4,811 148 324 2007 24.2 1,748 6,412 4,606 175 358 2008 24.7 1,879 6,734 4,796 187 389 2009 25.4 1,836 6,145 4,324 199 410 2010 27.45 1,969 6,258 4,551 219 446 2012 28.08 2,176 6,998 4,700 227 457 2012R 28.29 2,329 7,269 4,949 248 459 2013 28.83 2,235 7,146 4,882 264 472 Change 2004–2010 15% 21% -3% -5% 48% 37% Mtoe (million tonnes of oil equivalent) = 11.63 TWh (terawatt-hours).Primary energy includes energy losses.2012R: CO2 calculation criteria changed; numbers updated.
Petroleum
Reserves According to OPEC, Saudi Arabia possesses around 17% of the world's proven petroleum reserves. Apart from petroleum, the Kingdom's other natural resources include natural gas, iron ore, gold, and copper. In January 2007, Saudi Aramco's proven reserves were estimated at , comprising about 24% of the world total. They would last for 90 years at the current rate of production. 85% of Saudi oil fields found have not been extracted yet.
The Ghawar oil field is the largest oil field in the world, holding over . Ghawar is able to produce per day of oil. Aramco announced per day expansion and integration with neighboring petrochemical plants in Ras Tanura and Yanbu by 2010 to 2012.
However, according to journalist Karen Elliott House, "some energy experts are convinced that current reserves are substantially lower than those officially claimed by Saudis and that the depletion rate is substantially faster." According to a former senior executive of the state-run Aramco oil company Sadad Ibrahim Al Husseini the country's real oil reserves are 40% lower than the official estimate of 716 billion barrels of oil. House states, "no convincing evidence ever has been provided to support the increase [in Saudi oil reserves]. And tellingly, in 1982 the kingdom and other OPEC oil producers ceased releasing production data by field. ... Finally, Saudi Arabia has not revised its reserve estimate since 1988, even though it has pumped somewhere between a day for the intervening two decades, for a total of nearly ."
New oil fields New oil fields will add up to per day to production capacity by 2011. The new fields are Haradh, Khurais, Khusaniyah, Manifa, Neutral Zone (shared with Kuwait), Nuayyin and Shaybah I II & III.
Production
Saudi Arabia is the major oil producer in the world accounting for 12.9% of the global production.Key world statistics 2012 IEA
Saudi Arabia produces over per day of oil, exporting per day. The government is investing over $71 billion to increase oil production to near per day by 2009 and up to per day by 2015. This may be attributed to the report that of excess capacity are needed to compensate for a natural decline in availability.
The future of Saudi Arabian oil is complicated by the fact that the major Saudi oil fields are extremely old and have been producing oil for decades. Corrosion is becoming a large problem in addition to many other problems that come over time. The result is that most of the easily produced oil is gone from these fields and tapping the rest of the oil is probably going to be much more difficult and more expensive. Such increased difficulty and expense may indicate that Saudi Arabian oil fields have already peaked.
On 26 May, 2025 Saudi Arabia and Kuwait have announced a major oil discovery in the Partitioned Zone, near the North Wafra Wara-Burgan field, about five kilometers from the Wafra field. The well produced over 500 barrels per day of crude with an API gravity of 26–27 degrees. It’s the first find since joint operations resumed in 2020, highlighting the countries' continued energy cooperation and commitment to global supply security.
Shipping The majority of the oil is shipped via supertankers to refineries around the world. Three major ports are used for the shipping. Ras Tanura is the world's largest offshore oil loading facility with capacity. The Ras al-Ju'aymah facility, on the coast of the Persian Gulf, loads nearly 75% of the exports. The last of the three largest terminals is the Yanbu terminal located on the Red Sea. The enormous sea shipping capacity is vital to Saudi Arabia given the absence of international pipelines.
Export
For many years Saudi's ability to increase production of oil and stabilize price spikes led it to be compared to an international central bank and be called a "central bank of oil'.
Consumption
The Kingdom's consumption of its own oil production has steadily increased and it now consumes about one quarter of its oil production (approximately three million barrels per day). As of 2012 petrol in Saudi Arabia was sold at a price cheaper than bottled water—approximately US. According to Jim Krane, "Saudi Arabia now consumes more oil than Germany, an industrialized country with triple the population and an economy nearly five times as large." According to a report by Citigroup's analyst Heidy Rehman, "As a result of its subsidies we calculate 'lost' oil and gas revenues to Saudi Arabia in 2011 to be over $80 billion",Saudi Arabian power providers pay $5 to $15 a barrel for its fuel from state-owned Saudi Arabian Oil Co., according to the report. Brent crude, the benchmark for more than half the world's oil, traded at $116 a barrel adding that "at the domestic level, we believe the only real way to rationalize energy consumption would be to reduce subsidy levels."
Fossil fuel subsidies in Saudi Arabia have been reduced substantially since 2011. In 2016, the kingdom implemented the first wave of fuel price reforms in the 21st century as an initial step towards lowering those consumer subsidies. Citizen Account, a program that was simultaneously enacted to ensure targeted subsidies, ensured only lower-income Saudi citizens received financial support for fuels and other goods. Reforms of crude oil, fuel oil, and natural gas prices were fixed through 2023. Then, an accelerated pace of reform of those fuels' prices took place in 2024 and 2025. The faster adjustments of those fuels' prices took place as renewable power generation started to be installed in substantial numbers. |Saudi Arabia Renewables Tracker| 2025 It has been argued that the advent of renewable power generation has facilitated the accelerated lifting of consumer fuel price subsidies in Saudi Arabia.
Aramco Until 1973 the government did not receive a share of the oil drilled within its boundaries. In 1973 the Saudi government gained a 25% share of the interest from Aramco.Saudi Aramco History In 1980 the Saudi government purchased nearly 100% of the Aramco oil business giving Saudi officials complete control over prices and production. In 1988 the oil company was renamed Saudi Aramco. The company is controlled by the government but also has a board of advisors and a CEO. The current CEO and President of Saudi Aramco is Amin H. Al-Nasser.
Future perspectives The future prospects of energy in Saudi Arabia have been studied extensively by the King Abdullah Petroleum Studies and Research Center (KAPSARC). Furthermore, Saudi officials are not concerned about alternative energy sources hurting the market for its exports. In a 2008 interview with CBS, they asked Saudi Arabia's oil minister the following question: "Let me be blunt, okay? And ask you to be candid: is it Aramco's hope to prevent a switch away from oil? Somebody said, 'The country is the oil business.' You absolutely need to do this for your own survival". The minister responded by stating that:
Yeah, we admit a fact that yes, we depend on the oil industry. We want it to help us, you know, to develop our economy and develop the economy of the world. So what is good for the wellbeing of Saudi Arabia should be good for the wellbeing of the world, too... we have to be realistic. We don't have the alternatives today
Saudi oil policy is shaped by multiple factors and as these factors change and/or as new information becomes available, Saudi Arabia's oil policy will also change.
Natural gas Saudi Arabia has the world's fourth largest reserves of natural gas, of . One-third of this reserve is found in the Ghawar. Before the master gas system, the oil company flared (burned) the gas as it came from the oil well. Until recently production of natural gas was tightly controlled as it is so closely linked to oil production. The World Trade Organization criticized the government and Aramco for heavily subsidizing natural gas. According to the Energy Information Administration the price was US. On January 1, 2016, the domestic price of natural gas was raised to .
In January 2020, Aramco announced a $1.85 billion investment to set up the first natural gas storage facility in Saudi Arabia. In 2019, a study presented that natural gas storage is only financially viable if Saudi Arabia meets its natural gas production target in 2030.
Also, in February 2020, Aramco initiated a plan to invest $110 billion to develop gas reserves in Al-Jafurah field, Al-Ahsa Governorate, to start production by 2024 to 2036 when fully developed, which is expected to hold of wet gas, per day of ethane and per day of gas liquids and condensates.
In early 2026, Saudi Aramco signed a 20-year deal to receive 1 million tonnes of liquefied natural gas per year from the US.
Electricity
Saudi Arabia is the fastest growing electricity consumer in the Middle East, particularly of transportation fuels. In 2005, Saudi Arabia was the world's 15th largest consumer of primary energy, of which over 60 percent was petroleum-based. The remainder was made up of natural gas.