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Saudi’s Oil Demand Slumped During Recession


Middle East : 21 March 2010

In 2009 Saudi Arabia envisaged that they could not have been in a better position to increase their supply of Oil. Oil supplies were reportedly running short and they were about to begin expanding their Oil production by opening a new oil field capable of pumping 1.2 million barrels a day. This was just one project Saudi Arabia had in the pipeline to increase their Oil production to meet world demand.

As it turned out this was just around the same time that the world’s Oil demand began to slump. When the global recession began to take hold Saudi was forced to reduce production from the field by 25%. Khalid A. Falih is the CEO of Saudi Aramco the country’s largest Oil company and he confirmed that 2009 was a very volatile year in the Oil industry and that cutbacks and cash-flow constraints had been necessary to get them through this recessionary minefield.

America’s demand for Oil fell by more than 10% last year and this is a trend that looks set to continue for sometime to come. The only light at the end of the tunnel during this period was the rapid expansion of China, while demand in the US has dwindled China appears to be increasing its demand for Oil at a very rapid rate.

Now that the US are initiating new policies such as increasing bio-fuels and trying to lower their carbon emissions analysts now believe the fall in their consumption of oil is looking like a long term measure that will continue long beyond the current recession.

Andrew Reid, Staff Writer, Gulf Jobs Market News
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