Saudi Arabia And The Present Oil Crisis

The impact of the current situation in Libya on oil prices offer some advantages to some of the OPEC countries. While oil prices soaring, driven in particular by fears of shortages, Saudi Arabia is trying to pull out of the game by offering his "help". Finally, Saudi Arabia is trying to utilize this opportunity to inflate its oil wealth to greater extent.

Last Sunday, the Saudi oil minister has said in his country, as a leading member of OPEC, Saudi Arabia is ready to meet any additional supply to full fill the international demand. More over Minister Al al Nuaimi told they have enough stock as reserve for the supply since the raise in demand of Asian countries are more. Moreover he said their offer would impact heavy on the oil markets. Saudi Arabia the world's biggest exporter had already lowered its production. It was 8.29 million barrels per day in March against 9.1 million barrels per day in February.

Most of the petroleum user countries urged the Organization of Petroleum Exporting countries to raise its production targets in an attempt to stop the current surge in oil prices. Here I wish to point out one thing, in late February, Tehran has called on member countries of OPEC, and in particular Saudi Arabia not to  unilaterally raise their crude production. Iranian Oil Minister Massoud Mir Kazemi, emphasized the OPEC members not to take hasty unilateral decisions in case of any shortage in Oil. And their argument is current production suffices to fill the gaps created by the Libyan internal crisis.