Oil Policy Constraints

February 2007 | Economic Analysis

Despite reports of the existence of a secret Saudi-US compact to push oil prices down to pressure Iran, we generally tend to concur with the view that 'Saudi Arabia does not mix oil and foreign policy and cannot afford to' as expressed by Sadad Husseini, a former executive at state oil company Saudi Aramco. Such assertions have been put forward as a result of the weakening witnessed in the OPEC basket in recent months, which plummeted to as low as US$48/bbl in January - its lowest level since June 2005 - after having touched US$70/bbl last August. The argument goes

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