The rapid growth of domestic oil consumption in Saudi Arabia and the opportunity cost of oil exports foregone

► We analyze the rapid growth of Saudi Arabia's domestic oil consumption, now one-fourth of production. ► Estimated income elasticity of oil demand at least 1.5, using OLS and Co-integration. ► Yet IEA, DOE and BP project unprecedented slowdowns, from 5.7% historically to below 2%, half the rate of income growth. ► Continued high growth rates are more likely, with major implications for Saudi production and export levels.