Saudi Arabia - The Specialist in Oil Production

Buth Khuptanon

Specialization is when a nation concentrates its productive efforts and resources on a specific variety of goods to be most efficient and compete with other foreign countries. Since decades ago, Saudi Arabia has been known for being one of the largest producers and exporters of oil, second to no one except the United States. After 1938, when one of the World’s largest oil reserves was found in Saudi Arabia, the country started concentrating most of its labor and capital resources on oil production, allowing it to increase its oil output to match with the Americans. (National Geographic, 2022).

After specializing in oil production, Saudi Arabia has been able to efficiently use its scarce resources and utilize its advantageous geographical area. In 2022 alone, the revenue for oil production reached $326 billion (Omar, 2023), accounting for 22 8% of Saudi Arabia’s total GDP (Trading Economics, 2022) This comes to show that oil production has become a huge part of Saudi Arabia’s economy and suggests that it plays a huge role in escalating its growth

Unsurprisingly, the energy sector became the backbone of Saudi Arabia’s economy, and oil was at the heart of it. By 1970, they became one of the leading producers and exporters of oil, and by 1980, the government took control of the Saudi Aramco, one of the largest public petroleum and natural gas companies in the world (Wikipedia, 2023) Since then, the company has been exploring the vast geographical area to find more highgrade crude oil, discovering some new fields, such as one 175 miles southeast of Riyadh (The Royal Embassy of Saudi Arabia)

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Omar, A.A. (2023) Saudi oil revenue drop rounds off year of $326 billion windfall, Bloomberg.com. Bloomberg. Available at: https://www.bloomberg.com/news/articles/2023-0221/saudi-oil-revenue-drop-rounds-off-year-of-326-billion-windfall?leadSource=uverify+wall (Accessed: April 6, 2023)

Saudi Arabia GDP growth oil sector2023 data - 2024 forecast - 2011-2022 historical (no date)

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The Royal Embassy of Saudi Arabia (2022) Energy | The Embassy of The Kingdom of Saudi Arabia. Available at: https://www.saudiembassy.net/energy (Accessed: March 25, 2023).

Frequently asked questions (faqs) - U S energy information administration (EIA) (no date)

Frequently Asked Questions (FAQs) - U.S. Energy Information Administration (EIA). Available at: https://www.eia.gov/tools/faqs/faq.php?id=709&t=6 (Accessed: March 25, 2023).

The oil curse: A remedial role for the oil industry (2015) Available at: https://carnegieendowment.org/2015/09/30/oil-curse-remedial-role-for-oil-industry-pub-61446 (Accessed: March 25, 2023).