Saudi Arabia’s radical new oil strategy

0 55

By Bernard Haykel, Professor of Near Eastern Studies at Princeton University | Thursday, June 11th, 2020


Feeding the poor and needy is an act that draws us closer to Allah. We earn His forgiveness, mercies and blessings through this act of charity.

“Anyone who looks after and works for a widow and a poor person is like a warrior fighting for Allah?s cause, or like a person who fasts during the day and prays all night. (Bukhari)

Saudi Crown Prince Mohammed bin Salman, having realised that Saudi Arabia has a narrow window of opportunity to monetise its oil reserves, has embarked on a policy of capturing market share rather than trying to set oil prices

Saudi Arabia’s recent decision to crank up oil production represents a dramatic shift in its thinking about energy markets and its own reliance on oil revenues. Gone are the days when Saudi oil reserves were prudently managed for future generations. By no longer maintaining a specific oil price ban

d or retaining spare production capacity, the kingdom is stepping away from its longstanding role as the market’s swing producer.
The change reflects Crown Prince Mohammed bin Salman’s (MBS’) view that Saudi Arabia has a relatively narrow window of opportunity to monetise its large oil reserves. He has embarked on a policy of capturing market share rather than trying to set the price, once again breaking with long-standing policies that he believes are no longer useful.


If MBS persists with this strategy, he could significantly alter the dynamics of global energy markets. By keeping prices depressed, Saudi policy will not just drive more expensive forms of oil production out of the market, it will also make it harder for renewable energy to compete with fossil fuels – at least, in the near term.

Saudi Arabia has well over 50 years’ worth of recoverable oil reserves; most of that will become a stranded asset if it is not produced more quickly



Subscribe to our newsletter
Sign up here to get the latest news, updates delivered directly to your inbox.
You can unsubscribe at any time

Leave A Reply

Your email address will not be published.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy