It is a riddle wrapped in a Canada Goose online mystery inside

The Saudi oil enigma

canada goose store LONDON (Reuters) cannot forecast to you the action of Russia. It is a riddle wrapped in a Canada Goose online mystery inside an enigma, Winston Churchill told his listeners in a radio broadcast in October 1939.

buy canada goose jacket cheap Oil tanks Canada Goose Online seen at Canada Goose Coats On Sale the Saudi Arabia Shaybah oilfield complex in the Rub’ al Khali canada goose cheap desert November 14, 2007. REUTERS/ Ali Jarekji

Almost nothing is known about canada goose clearance sale how the kingdom rulers reach decisions on political and economic reform, foreign policy and oil market strategy (or indeed about anything else).

Outsiders are strongly discouraged from enquiring into matters of long term policy canada goose uk outlet and how decisions are made.

canada goose clearance sale The kingdom rulers have a communications strategy, reaching out privately to friendly journalists, analysts and other opinion formers.

buy canada goose jacket But for the most canada goose factory sale part it is deployed to shut down canada goose discussion and speculation they consider unhelpful rather than to convey or explain the context for long term policy and strategy decisions.

Canada Goose Parka In almost 20 years of buy canada goose jacket cheap writing about oil markets and the Middle East I have not come across anyone who could consistently offer a deep insight into the government policymaking.

cheap Canada Goose MYTHS ABOUT OIL POLICY In the absence of hard information, plenty of theories have grown up around Saudi Arabia strategy in the oil market, most of which contain some truth but are often incomplete or misleading. security guarantee.

This myth conveys an essential truth but does not help much in understanding the canada goose coats on sale complex relationship between the world largest oil exporter and its greatest military power. canada goose store Quincy in the Suez Canal in 1945 ( Faisal of Saudi Arabia: personality, faith and times 2012). petroleum engineers and geologists developed the buy canada goose jacket kingdom oil industry throughout the 1940s, 1950s and 1960s. The United States has had a canada goose coats discreet military presence since 1946 and the canada goose clearance two countries were close allies throughout the Cold War in opposing the spread of communist influence through the Middle East.

canada goose clearance More recently, the two countries found common cause opposing Iran revolutionary government following the overthrow of the shah and were allied throughout the Iran Iraq war and both the first and second Gulf Wars.

canada goose coats But the overall closeness of the relationship did not prevent them ending up on opposite sides during the Six Day and Yom Kippur wars, or the Saudis imposing an oil embargo on the United States in 1973, and the kingdom has pursued a contradictory line to the United States following the Arab revolutions that erupted in 2011 ( caravan goes on: how Aramco and Saudi Arabia grew up together 2013).

canadian goose jacket More generally, the close Canada Goose Outlet military and strategic links have not translated into an agreement on oil prices and production: it is emphatically not the case canada goose uk black friday that pricing policy is https://www.canadagooseoutletstore.co.uk the result of discreet negotiations between Washington and Riyadh. presidents has discovered the limits of their influence over the Saudis when it comes to oil prices and production.

Canada Goose Outlet QUESTIONS ABOUT CAPACITY Diplomats and even some economists often assert Saudi Arabia upholds canadian goose jacket its part of the bargain, in part, by holding spare production capacity with which to meet disruptions in oil supplies from other producers. Only Saudi Arabia has the financial capability and the foresight to invest in spare capacity to help stabilize global oil prices.

Canada Goose sale The problem is that there is almost no evidence to support this claim. Since the kingdom exports peaked at almost 10 million barrels per day in 1980, most of the spare capacity has been in the form of reduced output from older fields as new ones have come onstream.

Canada Goose online Most spare capacity appears to have been the result of past errors in forecasting oil demand and efforts to increase the amount of oil eventually recovered by lowering production rates from ageing fields like Ghawar to sustain reservoir energy and prevent water inundating the wells while bringing on new fields like Manifa.

Canada Goose Jackets Nearly Canada Goose sale all of the kingdom reported spare capacity has followed a downturn in prices and demand, notably during the 1980s and 1990s, which suggests that capacity is the result cheap canada goose uk of planning errors rather than deliberate policy.

There is no evidence that Saudi Arabia has deliberately developed large new fields simply to allow them to left idle in case there is a supply interruption elsewhere in the world.

canada goose deals RELUCTANT SWING PRODUCER Saudi Arabia is often described as the oil market producer a role which senior policymakers are said to dislike uk canada goose outlet after the trauma of seeing exports shrivel from almost 10 million barrels per day in 1980 to less than 3 million in 1985.

But if Saudi Arabia once played that role, it does so now to a much smaller extent, if at all.

canada goose coats on sale Some observers have suggested Saudi Arabia has stepped in Canada Goose Parka to fill the supply gap left by sanctions on Iran and the turmoil which has cut output from Libya, Sudan and Syria.

The canada goose uk shop kingdom is sometimes likened to a central bank managing uk canada goose the global oil market, adding or withdrawing supplies to control prices. But that canada goose black friday sale vastly overstates the degree of influence, let alone control, which the kingdom can really exercise over the market.

In the short term, the Saudis, acting in concert with close allies Kuwait and the United Arab Emirates or OPEC as cheap Canada Goose a whole, may exercise a mild restraining influence on price Canada Goose Jackets movements.

canada goose But there is no evidence that Saudi Arabia, or OPEC, has had a decisive impact on medium and long term price trends. The big price movements of the last 30 years have all originated outside the cartel ( 25 years of prices and politics 1988).