Saudi Arabia’s Oil GDP has decreased by 1.8% in the last year. With the overall production decreasing by 10% as well. And this loss is not new, in the past couple years Sasudi Arabia has continued to lose more and more profit off of their oil production and many think that this is going to hurt the growth of the country. The overall economy has shrunk by 3.7% in 2023 despite the cut backs in oil production and the reduced cost. Despite Saudi Arabia being the largest oil producer they have still had to continue to cut back the production of their oil and is now producing less than they could if need be. Because of the forced shift from the oil based economy Saudi Arabia once knew that cost is easily in the billions as the government tries to diversify the economy. They hope to achieve this shift in their economy by 2030 but the cost to the country is already astounding and they are prepared to have this rearrangement of the economy cost more as problems are bound to arise. And due to these extensive funds to rebuild/shift the economy Saudi Arabia is continuing to go into more debt. I think this is a great example of what countries have to do as the world systems change. Saudi Arabia has to protect its people and in this case it is allowing its people to prosper and the best way to do this is to shift away from oil. As the world becomes more climate friendly and there are more and more ways to find energy, it is only reasonable to assume that oil and the need for it will continue to decline. And while obviously the economy will struggle in Saudi Arabia for a time I think it is also important to note the effect on the power dynamics in the middle east. Saudi Arabia has influence and power that comes from their geography and as their geography loses value their influence may also become less in the area. Making this switch to diversify their economy is ever more pressing. As far as relating this back to class I think that this situation shows the significance of geopolitics and how it affects the global system. As the world starts to shift to more renewable energy sources Saudi Arabia will have to make changes if they want to stay relevant as their land and the resource it offers them becomes less valuable. And as Saudi Arabia’s oil loses value it is a possibility that Saudi Arabia if desperate enough will try to gain land to help strengthen their geopolitical standing. It also in a way makes me wonder as Saudi Arabia’s land becomes less valuable based on the way the world operates, which country’s land will become more valuable? Which country is having the opposite problem to Saudi Arabia?
