Why the Saudis aren’t lifting a finger to ease oil prices

Their break from past oil policy is significant.

Norfolk and Arlington, VA. – Here’s one of the most important puzzles of global oil security: Since the late 1970s, Saudi Arabia has pumped the market with oil, fearing that high prices could hurt global growth, reduce demand for Saudi oil, and anger its protector, Uncle Sam. Now, oil has almost doubled in one year to more than $90 a barrel, and the Saudis have barely lifted a finger despite the fear that high oil prices could increase the likelihood of an American, and therefore a global, recession. Why? The answer may define oil in the 21st century

…There is at least a minor possibility of something more ominous affecting the Saudi decision: The Saudis have been quiet because they are getting global markets ready for the possibility that they may not have enough oil to be a long-term fuel pump to the world. Consider that the US Energy Information Administration (EIA) significantly scaled back how many barrels of oil it expects the Saudis to produce in 2010. In 2000, the EIA forecast for Saudi production in 2010 was 14.7 million barrels per day. But last year, the EIA dropped that figure to just 11.4 million barrels per day. That’s a major reduction.

Christian Science Monitor