Can Saudi Arabia achieve oil diversification?

Saudi Arabia, the world's largest crude oil exporter, is seeking to prevent economic overheating and drive up inflation to promote growth in non oil industries. As the world's largest oil exporting country, the country has always relied on oil as its main source of income, with nearly 90% of its export revenue coming from it. Saudi Finance Minister Mohammad Jadan said this week that he will allow more time to implement large-scale investment projects under the "2030 Vision" plan to diversify the oil dependent economy. At the Qatar Economic Forum held in Doha on the 14th, he stated that if the economy is not allowed to catch up with projects, it will basically import more.

Firstly, the decline in oil prices and ongoing regional turbulence have put significant pressure on the country's economy, causing many people to worry about its future. With the rise of renewable energy and the push towards sustainability, global demand for oil is expected to gradually decrease, prompting Saudi Arabia to shift its economic structure towards other industries.

In addition, the attack on Saudi Arabia's oil facilities has also intensified the country's anxiety, with concerns that it may further destabilize the country and cause economic losses. The drone strikes on the Abdul Aziz refinery and the Hurais oilfield caused the largest disruption in global oil supply history, leading to a surge in oil prices and raising concerns about Saudi Arabia's ability to protect its important infrastructure.

Secondly, the achievement of global carbon neutrality and peak carbon targets will have a profound impact on Saudi Arabia's oil industry. The achievement of global carbon neutrality and peak carbon targets will lead to a decrease in global demand for fossil fuels, which in turn will lead to a decline in oil prices, which will have a certain impact on the revenue of the Saudi oil industry. The achievement of global carbon neutrality and carbon peak goals will accelerate the development of clean energy globally, further reduce the demand for fossil fuels, and also affect the development of Saudi Arabia's oil industry. Saudi Arabia's current economic model is highly dependent on the oil industry. If changes in global energy consumption patterns have a long-term negative impact on Saudi Arabia's oil demand, then Saudi Arabia must seek new economic development models.

Obviously, in order to alleviate economic pressure, the Saudi Arabian government has begun actively exploring new paths of economic transformation. As one of the world's largest producers and exporters of crude oil, Saudi Arabia has begun to pay attention to the development of the new energy industry with the transformation of the global energy market. The Saudi Arabian government has begun to invest heavily in the development and construction of renewable energy. Previously, the country's economy relied mainly on oil exports, but in recent years, oil prices have fallen. In order to maintain economic growth, it is necessary to achieve economic transformation through the new energy industry. The government's strong support in this regard will provide more opportunities and resources for the new energy industry.

Moreover, the geographical advantage of Saudi Arabia is one of its advantages in shifting towards new energy manufacturing. Saudi Arabia is located between Asia and Africa, with convenient transportation that can radiate to surrounding areas. With the huge market demand of its economic scale, it can quickly complete transformation. Saudi Arabia has rich experience and technological reserves in the petrochemical industry, which also have the potential for transformation and application in the field of new energy manufacturing. In addition, Saudi Arabia is also an early industrialized country with advanced manufacturing technology and industrial infrastructure.

In summary, Saudi Arabia has highlighted the fragility of the global oil market. Countries like Saudi Arabia face significant challenges in achieving economic diversification and reducing excessive dependence on oil. However, through careful planning and strategic investment, it may be able to pave a more sustainable path. The energy transformation is an important part of Saudi Arabia's transition from an oil dependent economy to a diversified economy, and the Saudi government has taken various actions to promote energy system adjustment and promote new energy development.