Weekly Graphic: Saudi Arabia’s Oil and Gas Infrastructure

This week’s map shows the major oil and natural gas infrastructure in Saudi Arabia. With oil prices slumping to $27 a barrel, from well over $100 just a couple years ago, the Saudis have already used up as much as 15 percent of their foreign reserves within an 18-month period. This totals more than $100 billion. But despite the significant impact of low oil prices on the kingdom’s economy, the Saudis themselves are in part responsible for the decline in the price of oil. The kingdom exports over 10 million barrels a day.

The view of the Saudis and their Gulf allies has been that they would only cut output after others in OPEC and, more important, non-OPEC producers such as Russia did the same. However, Moscow pumped some 10.88 million barrels per day in December 2015 — slightly ahead of Riyadh’s 10.14 million. The result has been that revenues have declined but the Saudis have not flinched. In fact, they continue to insist that their policy is working well. The outcome, however, is that global oil supply exceeds demand by approximately 2 million barrels a day. This drives the price of oil down further, and the lower it gets, the more the Saudis have to fall back on the use of their foreign reserves.

To read more about how low oil prices affect Saudi Arabia’s domestic and international strategies, see our discussion of a possible Aramco initial public offering.

Weekly Graphics are a recurring feature at Geopolitical Futures, in which we employ original artwork to examine regional or nation-specific issues.