Are Saudi Arabia’s Green Energy Plans Realistic?

If words could create reality, Saudi Arabia would probably be on its way to overtake China as the world’s most ambitious energy transition leader. The desert kingdom that produces a tenth of the world’s oil has been vocal about its renewable energy plans.

Yet, it has also been vocal about its oil production plans, which come down to a solid boost of output while the going is good. Because it’s getting increasingly uncertain just how long the going will be good for oil.

Earlier this year, as oil prices rebounded from the rout the pandemic had caused in 2020, Saudi Arabia hiked its export prices for its biggest—and most valuable—clients: importers in Asia. This caused a reaction from India, which depends on imports for more than three-quarters of its oil consumption, and this reaction indicated that importers may no longer be willing to buy at any price. The reason this was possible was the availability of alternatives.

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