By Noura Turki Al Saud

Oct 21, 2015

Since the oil price decline in the Fall of 2014, speculations concerning Saudi Arabia’s behavior in the oil market have been mounting. Traditionally viewed as the oil market’s savior, the Kingdom has borne the burden of oil market disruptions and price volatility since the boom of its oil industry, heightened in the years after the Arab oil embargo in the 1970’s. Today, this trend is being disrupted as Saudi Arabia relinquishes its customary role in stabilizing the market, refusing to bear the sole burden of defending prices. This step has unjustifiably generated noise about a global oil war, with accusations that the Kingdom is engaging in predatory pricing strategies and suspicions of its intentions to use its oil as a political weapon to pressure governments into acquiescence. In reality, what has taken place is a major transformation in global oil markets, where traditional roles are altered by new market players and advanced technologies that have disrupted the status quo ante. Net importers of oil are now becoming exporters, new producing countries are entering the market, and conventional exporters operating in sensitive political and security environments continue to defy expectations and prove the resilience of their oil industries.