Oil Security Index: Three New Countries, Spotlight on Saudi Arabia

Earlier this week, Securing America’s Future Energy (SAFE) released the second quarterly installment of its Oil Security Index for 2015, measuring the oil security of sixteen countries around the world. Countries are measured on key indicators, such as their structural dependence on oil, economic exposure to the global oil market, and capacity to respond to oil supply disruptions. ​ This latest Index update shines a light on Saudi Arabia, having decided to maintain production levels in today’s low price environment in order to preserve its market share. The Kingdom is the lowest-ranking country in the Index due to factors including its near-complete dependence on oil export revenue and its high oil consumption levels at home. Requiring a fiscal breakeven oil price above $80 per barrel, Saudi Arabia has projected a record-breaking fiscal deficit of $38.7 billion for 2015. Moreover, the Kingdom has begun drawing from its monetary reserves to stave off the effects of low oil prices—reducing its assets from a record $737 billion in August 2014 to $707 billion as of February 2015—a sign that the country continues to prioritize economic growth and social spending and is willing to draw on its savings to protect market share, an option many of its fellow OPEC nations do not have. ​ This latest Index update also welcomes the addition of three new countries—France, Norway, and Indonesia—ranking fifth, seventh, and tenth place, respectively. The United States ranks eighth, nudged downward by the additions of France and Norway. The U.S. was the largest contributor to non-OPEC supply growth in this quarter’s update, adding 1.6 million barrels per day (mbd) year-over-year (y-o-y) and 0.4 mbd quarter-over-quarter. However, the U.S. also increased its oil demand 0.2 mbd y-o-y and by 0.3 mbd over Q3. The U.S. ranks second in terms of highest Fuel Consumption Per Capita, and economy-wide oil consumption leaves the country vulnerable to high and volatile oil prices. Click here to read the full update.