Saudi Arabia's revolution train is approaching slowly. The engines of this expected change are the Saudi ageing and divided ruling family and most importantly: an economic decline.The crucial oil sector which accounts for about 80% of its budget revenues, is not growing, according to this convincing analysis:
What will happen to oil production between now and 2020? Production from most wells declines with age. Wells that have been producing for a long time, including Ghawar, will at some point start producing less. (In fact, we don’t know if Ghawar is already producing less, and the new production that has been brought on line is covering up the decline.) It seems as though we should start seeing a decline in production in the next few years, if no more production than this is brought on line. Given these considerations, there would seem to be a fairly high probability that Saudi oil exports will decline more rapidly in the next few years. If this happens, Saudi Arabia will encounter financial problems unless the price of the oil rises very substantially, because of the need to fund its social programs. Deutche Bank analyst Paul Sankey estimates that Saudi Arabia now needs $92 a barrel to break even fiscally because of greater social spending, up from $60 barrel in 2008. If exports decline in future years as production falls and consumption rises, further escalation in the break-even price can be expected. Once new programs are put in place, it is difficult for a government to remove them.
If Saudi Arabia fails to meet its spending pledges which are aimed at stopping the revolutions' train from stopping in Riyadh, then change might happen, even after a few years. We have to remember that the next few years are crucial to the royal Saudi family's future. The current succession is horizontal between the sons of the late King Abdul Aziz, ; they are all ageing, in their late 70s and 80s. Competition between their sons is raging, and there is a lot of anxiety in Saudi Arabia over what happens next. If this is coupled with an economic decline, then change will definitely happen in a few years if not before.
(Video: Saudi Prince throws cash on a dancer)