RE: Saudis and oil - a chapter closed?
I live in the area and work in this, among other refineries daily. Let me explain what's actually happened. I want so bad to reply to so many of the comments but I don't have enough time.
They (Saudi Arabia d.b.a. Saudi Aramco) didn't "take control" or even randomly show up and buy the largest refinery in the country.
They already owned it. 49% of it, actually.
Three refineries in total (Convent, Norco, and Port Arthur) were owned by Motiva. Motiva is the name of a co-op between Saudi Aramco and Shell Oil.
This has been the way it was for years. Mommy and daddy were fighting and decided it's best to get a divorce. Shell got the Convent and Norco refineries and Saudi Aramco got Port Arthur. Saudi retains the right to continue to use the Motiva brand name. The reason you don't read a lot about Saudi Aramco having owned oil/gas production in the US is simple and obvious....just look at this comment section of people who think it's just now happening. Pitchforks abound. Just because it's news doesn't always make it new.
The oil Reserves of Saudi Arabia is around 265 Billion Barrels -being about 16% of worlds reserves (these are 2012 estimates). At current production rate of around 11 million barrels /day the reserves will last for about 63 years.
But the most remarkable fact has been that most countries have been adding to their reserves by new discoveries from exploration and improvement in technologies. For eg. taking the Middle east as a whole, the estimated Reserves was 343 Billion in 1970, while it is about 800 Billion as per 2012 estimates. This trend is likely to continue as there is still plenty of exploration to be done and technology keeps improving continuously.
Over and above the oil reserves, Saudi and ME has plenty of Gas to be tapped.
All this means that it will be quite some time before the situation of 'running out of oil' is reached.
Now coming to what is likely to happen to the economy, it depends on how the rulers of the country have been using the oil bonanza they have been enjoying- if it is used to build infrastructure and more important, to improve the skill and knowledge base of the population- then there is nothing to really worry about.
Having oil is not a pre-requisite to high standard of living and development- Japan never had any oil, neither does it have other significant mineral resources- all the same it is one of the most advanced industrial powers.
The most important challenge for ME countries will be how the rulers will manage their social and political system as it evolves. If it cannot be managed with vision and foresight, all the oil will be of no avail, let alone oil running out.