The Peter Zeihan Podcast Series What's Up with the Middle East: Saudi Oil Slips || Peter Zeihan
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Jun 10, 2025 The dynamics of oil demand between the U.S. and China are shifting, highlighting the U.S.'s move towards a services-driven economy. Meanwhile, Saudi Arabia grapples with significant market pressures and security challenges, as it faces the reality of U.S. energy independence and rising shale production. The impact of these changes on global oil prices and strategies is discussed, painting a picture of a rapidly evolving energy landscape in the Middle East.
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US Oil Demand Drops
- US oil demand has actually dropped in the last 15 years despite appearances.
- This is due to increased efficiency and transition to a services economy.
China Leads Oil Consumption
- China is now the world's largest oil importer and likely the largest consumer.
- Its demand is price and factor insensitive due to job-driven industrial growth policies.
US Shale Oil Boom
- US oil production surged from under 5 million barrels to around 15 million barrels in 20 years.
- Shale oil, though easier to refine, does not match US refinery needs perfectly, prompting exports.