The world last year watched to see if Saudi Arabia would suffer the same instability that swept away other regimes in the Middle East. The question now is whether the world’s largest oil supplier needs to raise prices to sustain ramped-up spending intended to calm its citizens. Higher prices would be bad news for Western governments, which need affordable oil to nurture their economic recoveries.
The Saudis rarely spell out exactly what they are thinking on the topic, but there are signs their strategy has changed, and they are increasingly willing to raise prices. Still, they seem not inclined to let prices go sky-high. A year ago Saudi oil minister Ali Al-Naimi said oil at $70 to $80 a barrel was fair. Then on Nov. 21, Al-Naimi said he was “very happy” with current crude prices; on that day oil traded close to $98 a barrel. Prices are now around $106 a barrel.
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