Saudi Arabia’s juggling act
25 January 2012
The kingdom is poised to play a key role in shaping this year’s oil market, but it must maintain a delicate balance between global and domestic demands. James Gavin reports
THE BOUT of sabre-rattling across the Strait of Hormuz is proving an unlikely source of empowerment for Saudi Arabian policymakers. Having come to the rescue of the world’s oil market last year, helping compensate for the loss of about 1.6 million barrels a day (b/d) of Libyan production, the threat of an embargo on Iranian oil and the Tehran government’s counter-threat to choke oil shipments from the Mideast Gulf has again foisted the role of global saviour on the kingdom.
It is a mantle that the Saudi’s appear more than willing to adopt. Despite oil output exceeding 10 million b/d in recent months, the highest for 30 years, Saudi leaders say there is significantly more in the tank, should the market require it. "We can easily reach 11.4 million to 11.8 million b/d almost immediately, in a few days. All we need is to turn valves,"...