The impact of oil price volatility on economic growth

The aim of this study is to determine the impact of domestic petroleum demand volatilities on economic growth in Saudi Arabia. It is suggested to use the strategy statistical tools and estimation techniques necessary to achieve this aim. A demand and supply strategy can be developed to predict the demand for petroleum products correctly. The econometric analysis showed that the annual rate of increase in domestic oil demand was almost doubled compared with the average annual income growth rate (GDP), which was 4.93 and 2.46% per annum. Despite the rapid technological progress of renewable alternative energy sources, crude oil still accounts for 40.6% of the globally produced energy. Oil price changes determine the inflation rate and unemployment level, which have influenced the growth rate of the economy and led to government austerity measures.