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Over the years, the country has established its supremacy in the global oil market. For the past decade, a mean yield of 10.26 million barrels per day has been produced by the country. Figure 1 shows that this is 12% of the total world supply. In 2011, the oil-based economy generated 11.8 million barrels per day, raising their production share to 13%. The world Saudi Arabia is followed by Russia, United States of America, and China with shares of 12%, 12% and 5% respectively (See Appendix Table A).

The domestic production of the country grew by a yearly average of 3.6% from 1991 to 2011.This growth is helpful for the country’s export market and profitability making it beneficial for the overall development of the economy (Yizraeli, 2000). In terms of exports, Saudi Arabia also led the industry in 2009 with 8.2 million barrels a day. The country has captured 12.4% of the total world exports during the year. Russia placed second with 5.2 million followed by Iran with 2.8 billion. 20% of the country’s exports go to the United States of America.

Japan and South Korea also imports significant portions of Saudi’s supply (US Energy Information Administration, 2010). On the other hand, despite the consistent boost in production of oil, the world demand for the commodity has been volatile. Figure 2 shows the instability in the world-wide demand for oil, these factors may have been influential to the export performance for crude oil. Figure 2 depicts the demand of the world, US, Japan and South Korea. The latter three mentioned were also included because these are significant importers from Saudi Arabia.

The demand for oil has been volatile from the 1990s to early 2000 as reflected from the fluctuations in the graph. Near 2008, downward demand trends are manifested from the world, US, Japan and South Korea. Periodic drops in demand are apparent, and seem to relate to business cycles. During this