March 24, 2016
Saudi energy changes: The end of the Rentier State
The effects of a low-price global oil market have the potential to reshape the fundamental governance systems of Saudi Arabia. In his new report, Saudi energy changes: The end of the Rentier State, Jean-François Seznec explains that, as a result of shrinking income from oil, “It seems . . . that the country is moving away from being the epitome of a rentier state to resembling more closely the economies of the more developed nations of the G20, of which Saudi Arabia is a member.”
Dr. Seznec, a senior fellow with the Atlantic Council’s Global Energy Center and a renowned expert on Gulf energy markets examines the impact of altered dynamics within the Saudi energy industry, given systematic changes within the monarchy, low oil prices, changed global markets, and Saudi foreign policy in the region.
“It has become commonplace to say that there is a social contract in Saudi Arabia between the people and the royal family, whereby the royals provide sustenance in exchange for political and economic control. If this were ever the case, it will now change.” -Dr. Jean-François Seznec
Saudi Aramco is the largest oil company in the world, and the Saudi dependence upon it has become strained. Dr. Seznec provides a comprehensive examination of Saudi energy assets and the potential diversification and reform measures the Monarchy could take to stabilize their economy.