

Who knows what’s really going on as I say, much of the press was banned.īut I’m not so sure the above narrative is entirely correct. Opec as a stabilising influence in the world economy, adjusting production to keep prices on an even keel, has had its day, and it’s everyone for himself. That there are other beneficiaries of high oil prices, such as Putin’s Russia, is by the by, and just an unfortunate side effect of Saudi acting in its own interest.Īlso unfortunate is that the higher the oil price, the greater the depressing effect on Western economies. The higher the price the better, sod the world economy. Conscious that its greatest asset, oil, will as a result of the global response to climate change eventually be on a declining trajectory, Saudi has determined to exploit it as fully as possible while it still can, maximising the proceeds for as long as possible. The kingdom’s actions in committing to a cut in production have therefore left everyone guessing. Neom and other such vainglorious plans for castles in the sand are extraordinarily ambitious – and expensive – endeavours Saudi needs all the money it can get. It’s quite a gamble, because the oil price does indeed need to rise by a considerable margin to cancel out the negative effect on Saudi’s overall revenues of the cut in production. Also virtually unheard of is for Saudi Arabia to go it alone in cutting production – even as at least one other member of Opec is about to increase it – and for said cut to have virtually no effect on the oil price. No doubt there have been other such bans, but in recent decades it is unheard of. Maybe the pesky hacks will learn their lesson now that they are frozen out – not.

Saudi’s current energy minister, Prince Abdulaziz bin Salman, is said to be acutely unhappy with the press for not giving sufficient column inches to his view that the oil price should be much higher. To ostracise the press is never a good look and almost invariably signals an organisation on the back foot or otherwise in terminal decline. You could tell things were about to go badly wrong when Bloomberg and Reuters were summarily banned from access to proceedings at last week’s meeting in Vienna. The Organisation of the Petroleum Exporting Countries (OPEC), which has always had Saudi Arabia as its de facto leader, has long since lost much of its discipline, power, and influence – and judging by the events of last weekend is these days pretty much a busted flush. With the merest flick of the eyebrow he could send the oil price either soaring or plummeting, and with it the fortunes of the West’s advanced economies. People would hang on Sheikh Yamani’s every word as if the legendary Saudi oil minister were some kind of Pythia, the Oracle of Delphi.

Time was when Saudi Arabia was so powerful that it could command the future, or at least the future of the world economy.
