ABSTRACT
With the basic foundations of the Saudi Arabian economy sketched, a sectoral analysis offers greater detail. The first step towards this analysis unquestionably involves the economics of the petroleum industry in general, as well as the more specific role of the oil industry in Saudi Arabia. While it is not within the scope of this chapter to present the multi-faceted complexities of the world petroleum industry, it is helpful to present at least a brief overview of the more relevant work that has already been done in this area and into which the predominant role of Saudi Arabia can be fitted. In so doing, the characteristics and structural features of this industry will be examined as well as the nature of supply and demand for energy. Certain institutional characteristics of the economics of oil, most notably the OPEC, are not only critical as fundamental structural changes in the industry, but also as channels through which the Kingdom of Saudi Arabia operates. Finally, and most importantly, the discussion of the Saudi Arabian petroleum industry must be presented in a context of global and domestic economic development.
