Abstract

What is the value of saving a barrel of oil that would otherwise had been consumed domestically? This study explores the question, taking a long-run perspective into a general equilibrium approach. In the case of Saudi Arabia, the difference between the domestic price of oil and the international price represents an opportunity to improve economic efficiency across different activities and sectors. In this context, we study different policies aimed to reduce the domestic consumption of oil.

Authors

Jorge Blazquez

Jorge Blazquez

Former Research Fellow Jorge is a former research fellow specializing in energy and economics, with research interests in energy and macroeconomics, energy policies… Jorge is a former research fellow specializing in energy and economics, with research interests in energy and macroeconomics, energy policies and transitions.

Baltasar Manzano

Visiting Researcher Baltasar is an associate professor of economics at the University of Vigo and has been a visiting researcher at KAPSARC… Baltasar is an associate professor of economics at the University of Vigo and has been a visiting researcher at KAPSARC since 2014. From 2005 to 2009, he served as an economic advisor to the president of Galicia. Baltasar has a Ph.D. in economics from the Universidad Complutense, Madrid, and has published extensively in academic journals, mainly focusing on the intersection of macroeconomics and energy.

Expertise

  • Energy economics
  • Public economics
  • Public finance
  • Dynamic macroeconomics

Publications See all Baltasar Manzano’s publications

Axel Pierru

Program Director Axel is the director of KAPSARC’s Energy and Macroeconomics program. From October 2018 to March 2019, he was KAPSARC’s interim… Axel is the director of KAPSARC's Energy and Macroeconomics program. From October 2018 to March 2019, he was KAPSARC's interim vice president of research. Axel joined KAPSARC in 2011, after spending 15 years at IFP Energies Nouvelles in France, where he led research, consulting and training projects. Axel received his Ph.D. in economics from the Pantheon-Sorbonne University in Paris. He undertakes applied research that combines methodological innovation with practical relevance for policymaking. His research is focused on energy economics, policy, finance, oil pricing, and energy-exporting economies. Axel has been published extensively, with over 40 peer-reviewed journal papers to his name.

Expertise

  • Energy modelling
  • Energy economics
  • Energy policy
  • Oil pricing and finance

Publications See all Axel Pierru’s publications

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24 Jul

Opportunity Cost of Oil for Saudi Arabia

Saudi Arabia’s economy is passing through a phase of transformation in which some resources will be freed from existing usages and allocated to new development opportunities. Making decisions based on the wrong opportunity costs or value of these resources could lead to over- or under-investment in projects. In particular, the international oil price may not […]

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