Comments on: Recycling Petro-Dollars http://xrdarabia.org/2008/05/21/recycling-petro-dollars/ Informed comment and commentary about Saudi Arabia, reform, and its relations with the US Wed, 23 May 2012 23:26:18 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: John Burgess http://xrdarabia.org/2008/05/21/recycling-petro-dollars/comment-page-1/#comment-13193 John Burgess Thu, 22 May 2008 17:35:20 +0000 http://xrdarabia.org/?p=4670#comment-13193 It's not only imports. The Saudis expect to be doing a lot of non-oil exporting as well. They are effectively diversifying their economy, though of course there's more to do. It’s not only imports. The Saudis expect to be doing a lot of non-oil exporting as well. They are effectively diversifying their economy, though of course there’s more to do.

]]> By: Solomon2 http://xrdarabia.org/2008/05/21/recycling-petro-dollars/comment-page-1/#comment-13192 Solomon2 Thu, 22 May 2008 13:45:26 +0000 http://xrdarabia.org/?p=4670#comment-13192 I recall that in the 1970s the KSA ran out of capacity to handle the massive amounts of <i>imports</i> into the country, so building new ports now makes a certain amount of sense. However, unlike investing in new oil fields - because oil can be sold ahead on the futures markets for an assured return - one can get burned if one builds new port facilities only to have demand drop unexpectedly. The decision to build a new port, then, means that the Saudis really expect the oil money to keep flooding into their country for at least a decade. I recall that in the 1970s the KSA ran out of capacity to handle the massive amounts of imports into the country, so building new ports now makes a certain amount of sense.

However, unlike investing in new oil fields – because oil can be sold ahead on the futures markets for an assured return – one can get burned if one builds new port facilities only to have demand drop unexpectedly. The decision to build a new port, then, means that the Saudis really expect the oil money to keep flooding into their country for at least a decade.

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