Saudi Arabia's domestic reliance on oil to generate electricity is starting to fall structurally—a genuine step towards its Vision 2030 objective of eliminating oil entirely from its power industry, according to Bitumenmag. After decades of heavy dependence on crude and oil fuel to supply peak seasonal energy demand, recent data show the Kingdom is actually overturning this historic trend. This was due to enhanced production of natural gas, accelerated renewable energy initiatives, as well as rigorous efficiency reforms.
Statistics OPEC has been reported to and released by the Joint Organizations Data Initiative (JODI) show that the country's use of crude, fuel oil, and gasoil for power declined an average of 270,000 barrels per day during the middle of 2025. While cooling demand picked up and ever-growing population persisted, International Energy Agency (IEA) statistics show that overall use of oil in power declined nearly 100,000 barrels per day from the same period last year. The agency attributes the drop to enhanced gas supply and increasing renewable capacity.
The reduction is part of Saudi Arabia's Liquid Fuels Displacement Program to reduce domestic oil consumption by some 1 million barrels per day by 2030. Central to this effort is the Jafurah unconventional gas field, which is set to go into full production in the near term. Once in production, Jafurah would increase national gas output by some 60% above current 2021 levels and replace more than 300,000 barrels of crude currently consumed in electricity generation. Add-on gas schemes would, additionally, take up to 500,000 barrels of local demand off the market by the end of the decade.
Today, natural gas generates roughly 62% of Saudi electricity, oil generates around 38%, and renewables generate less than 1%, estimates the U.S. Energy Information Administration. Vision 2030 envisions an even split between renewables and gas, a balance that would free up over 1 million barrels of fuel oil and crude for export—unleashing tremendous added revenue potential.
The transition, however, is taking place in stages. Numerous gas-fired plants that are in the process of replacing oil-burning stations remain in the pipeline and set to come onstream between 2027 and 2028. To mention but one example, the present upgrading of the PP10 power station outside Riyadh, which will soon replace half its turbines with gas, could reduce oil consumption by as much as 60,000 barrels per day alone. Other projects, such as the Yanbu 2 plant, are queued up to fill the gap until 2030.
Concurrently, Saudi Arabia is expanding its foundation of renewable energy faster than the rest of the Middle East. Installed capacity leaped from hardly more than 3 GW in 2023 to well above 10 GW online halfway through 2025, with another 2.5 GW coming within a relatively short time thereafter. Renewable capacity will, by 2030, possibly exceed 130 GW—powered predominantly by solar and wind. Even with conservative IEA projections of nearly 100 GW, Saudi Arabia would represent some one-third of overall renewable growth in the MENA region.
In total, electricity use in the MENA area is forecast to increase 50% by 2035, or a further 750 terawatt-hours of production. The Gulf states, through their air-conditioning and water desalination needs, will be responsible for this increase. Oil's contribution to the regional power mix is forecast by the IEA to decline significantly from 20% in 2023 to around 5% in 2035, to be replaced primarily by gas and renewables.
For Saudi Arabia, the implications are enormous. Removing oil from electricity production could save over $150 billion in export revenues by 2035, reduce the cost of fuel subsidies, and protect the national electricity sector from global oil price fluctuations. It also solidifies the Kingdom's climate and environmental sustainability promises.
Yet, challenges do remain. Robust population and industrial growth continue to propel electricity demand, potentially negating the effect of efficiency gains. As long as renewable and gas infrastructure does not materialize, seasonal peaks in oil use are set to persist. Some analysts also question achieving the whole 2030 renewable target.
Despite such obstacles, the course is set. Further oil consumption cutting is an irrevocable move toward energy diversification. With gas output rising, renewable schemes rise in quantity, and massive power station conversions are underway, Saudi Arabia is moving incrementally towards achieving its ultimate objective—breaking its electricity grid away from oil dependence and cementing itself as a global energy exporter.
By WPB
Oil, Petroleum, Bitumen
If the Canadian federal government enforces stringent regulations on emissions starting in 2030, the Canadian petroleum and gas industry could lose $ ...
Following the expiration of the general U.S. license for operations in Venezuela's petroleum industry, up to 50 license applications have been submit ...
Saudi Arabia is planning a multi-billion dollar sale of shares in the state-owned giant Aramco.
