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Saudi Arabia will act to lower soaring oil prices
Ali Naimi, Financial Times
High international oil prices are bad news. Bad for Europe, bad for the US, bad for emerging economies and bad for the world’s poorest nations. A period of prolonged high prices is bad for all oil producing nations, including Saudi Arabia, and they are bad news for the energy industry more widely...
(March 28, 2012)
Saudi Arabia resorts to Jedi mindtricks
Izabella Kaminska, FT Alphaville blog
Saudi Arabia’s oil minister Ali Naimi penned a sharply worded piece in the Financial Times on Thursday declaring that high prices are unjustified because “there is no lack of supply.”
But what does resorting to an op-ed in the Financial Times actually tell us about the kingdom’s position?
Could it be that the Saudis have taken a leaf out of the Fed’s book, an institution also known to have lost firepower, and resorted to communications as a policy instrument in its own right? That is, when all else fails, resort to Jedi mindtricks: “This is not the supply shortage you’re looking for”...
(March 29, 2012)
Saudi Arabia: Paper Tiger?
Liam Denning, Wall Street Journal blog
Ali Naimi is not fond of extremes. The Saudi Arabian petroleum minister is so worried by high oil prices — Brent crude commands about $123 a barrel — he felt compelled to pen an Op-Ed in today’s Financial Times. The last time he took to the newspapers, according to a search of Factiva, was back in February 2009, following oil’s crash from triple digits to less than $40 amid the financial crisis.
Mr. Naimi’s message Thursday was simple: very high oil prices are bad for the global economy, which is ultimately bad for oil demand, and Saudi Arabia will act to bring them down. He singles out Europe in particular as an example of a weak economy being undermined further by high energy costs, a point echoed in the OECD’s latest assessment of economic prospects, also released Thursday.
Oil accounts for 45% of Saudi Arabia’s economy and the vast majority of its (swelling) public budget. Its rulers know that geopolitical risks centered on Iran are keeping prices high. That is encouraging consuming countries to look for alternative energy sources, reduce energy consumption, and even consider releasing barrels from strategic reserves...
(March 29, 2012)