Saudi Arabia Aims to Reduce Domestic Liquid Fuel Consumption by 1 Million Bpd

Saudi Arabia is implementing a strategy to reduce its domestic liquid fuel consumption, targeting a displacement of more than 1 million barrels per day (bpd) by 2030, according to OilPrice.com. This initiative aims to free up petroleum for alternative uses, such as export, by reducing reliance on crude oil and fuel oil for power generation and other sectors.

The kingdom's power stations, desalination plants, factories, and farms collectively consume over 1 million bpd of liquid fuel. The primary energy sources intended to replace this consumption are natural gas and renewables, which are expected to account for the majority of the displacement within the specified timeframe.

Energy Transition and Growth

While natural gas and renewables are central to the immediate displacement targets, nuclear power is also being considered for a larger role post-2030 as electricity demand in Saudi Arabia continues to grow. OilPrice.com reports that the kingdom's electricity demand grew by 3.8% in 2025 and is forecasted to average 3.1% annual growth through 2030, according to IEA estimates. A proposed 2.8-gigawatt (GW) nuclear plant could, in the long term, displace the equivalent of approximately 105,000 bpd of crude.

Saudi Arabia's consumption of crude oil and fuel oil for power generation typically sees a significant increase during the summer months due to peak air-conditioning demand. In June 2024, combined burn reached 1.42 million bpd. Conversely, consumption significantly decreases in cooler months, averaging 678,000 bpd in January and February 2025, with February alone recording an 11-year monthly low of 589,000 bpd, OilPrice.com stated, citing EIA data.

Strategic Energy Investments

A key component of Saudi Arabia's strategy is the development of its natural gas resources. Production began at the Jafurah unconventional gas field in December 2025. This field is integral to Aramco's objective to increase its sales-gas production capacity by approximately 80% by 2030 compared to 2021 levels. In parallel, Saudi Arabia is targeting up to 130 GW of renewable energy capacity by 2030.

Regarding nuclear energy, the United States and Saudi Arabia signed a 30-year civil nuclear cooperation agreement on 22 July. This agreement, as reported by OilPrice.com, could facilitate U.S. companies supplying reactors, nuclear materials, and technical services to Saudi Arabia. Similar agreements had previously been established with Turkey in June 2008 and the UAE in December 2009. While this agreement opens opportunities, nuclear power is not expected to contribute materially to the 2030 liquid fuel displacement target due to the absence of a selected reactor vendor or established construction timeline. The proposed location for Saudi Arabia’s first commercial nuclear plant is Duwaiheen, on the Gulf coast, where the Saudi regulator has granted a site-preparation licence.