ABSTRACT
The traditional social contract between the Sa'ud family and influential stakeholders in politics, religion, and administration must be redefined and extended to those formerly outside the classical patronage networks. This chapter focuses on the impacts of the low oil price upon Saudi Arabia's energy and economic situation, as well as the implications for the country's fragile external and internal security situation, and the leadership's reform agenda. Thus, Saudi Arabia is in dire need of a sustainable and full-fledged economic diversification to overcome oil dependency by strengthening the non-oil sector, creating job opportunities, and modifying domestic energy consumption. Moreover, Saudi Arabia's oil price policy, intended to weaken international competitors, has backfired and destabilized Saudi Arabia's economic position. In times of low oil prices, the Saudi leaders have to deal simultaneously with higher energy demand and reduced funds for an energy system transition. This will further challenge the spending mentality of the Saudi rentier state.
