Saudi Arabia: Don’t Blame us for Oil’s Big Plunge

Saudi Arabia isn’t a fan of the “conspiracy theories” surrounding the kingdom’s oil policies.  Oil took a massive plunge from over $100 a barrel in July to under $50 in January. Saudi Arabia’s refusal to cut production, especially when oil hit around $70 at Thanksgiving, raised eyebrows about the country’s motives.

In the past, Saudi Arabia would respond to a supply glut like the current one by pumping less oil.  Energy analysts began to speculate that the Saudis were trying to kill off the North American shale revolution. Some shale operations are no longer profitable when oil falls below $50.

Theories claiming OPEC has a “war on shale” and that OPEC is dying are wrong, Saudi oil minister Ali al-Naimi said in a speech on Wednesday in Berlin.  “OPEC and Saudi Arabia have yet again been maliciously — and unfairly — criticized for what is, in reality, a market reaction,” the powerful official said.  Al-Naimi said huge price swings often trigger a “frenzy of commentary ascribing various bizarre theories and motives — about collusion or conspiracy — to OPEC” and Saudi Arabia.

CNN

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