Saudi Arabia is largely responsible for the dramatic fall in oil and gas prices in recent months, a U.S. government official said.
Richard Fisher, the head of the Dallas Federal Reserve, said “the Saudis have engineered” the oil crisis. He was speaking Wednesday at the Economic Club of New York.
“We are a huge supplier of energy. The Saudis took a while to realize what was going on,” Fisher said, referring to the massive growth of the U.S. oil industry in recent years.
Fisher is the most prominent U.S. official to pin the blame largely on Saudi Arabia.
As recently as July, oil traded at over $100 a barrel. By January, it had plunged below $50.
Saudi officials have repeatedly blamed supply and demand for the price meltdown. They say they were caught off guard by the price decline, and acknowledge this is putting a lot of pressure on U.S. shale.
“Although Saudi Arabia and OPEC countries did not engineer the reduction in the price of oil, there’s a positive side effect, whereby at a certain price, we will see how many shale oil production companies run out of business,” Prince Alwaleed bin Talal, a member of the Saudi royal family and prominent global investor, said in January.