Saudi Arabia is losing its appetite for oil

YOU KNOW that horror movie trope where the babysitter gradually realizes the crazed killer is phoning, not from some distant location, but from inside the house? Something similar is happening in the oil market.

- By David Fickling

That's because Saudi Arabia, the world's biggest net exporter of crude, is using renewables to drastically reduce its petroleum consumption. The threat to the kingdom's producers isn't coming from the heartlands of electric vehicle adoption in Shenzhen, Oslo, or San Francisco it's right inside the house.

This is an extraordinary reversal. Since the start of the 21st century, Saudi Arabia's oil consumption has increased more than any other country barring China and India. It's doubled to 2.3 million barrels per day, greater than the incremental demand from Africa, Latin America, or the former Soviet Union.

Between a quarter and a third of the country's consumption goes into crudeand fuel oil-fired generators that provide electricity to ride out summer heatwaves. The government wants to replace all of that with renewables, with a target of 130 gigawatts (GW) by 2030 roughly equivalent to all the solar power in India. Such a switch could represent the single largest decline in oil demand over the next five years, according to the International Energy Agency.

It's not news that the country has such ambitions. One of the cornerstones of Vision 2030, the program announced in 2016 to wean the kingdom's economy off hydrocarbons, was to switch the grid to an exclusive gas-renewables mix.