There was something brave about Saudi Arabia’s swift response last week as the May Brent-crude-oil price momentarily soared past $127 a barrel, some 30% higher than the price last fall and only $20 off the historic high registered in summer 2008.
The immediate cause of the new energy crunch is obviously the expected plunge in Iranian supplies. Recent reports suggest Iran is already reducing production levels in anticipation of reduced demand in the wake of tightening sanctions.
Under other circumstances the Saudi government might have focused on the financial benefits of rising energy prices, but in this case the political context left the Saudis no choice but to fight the market trend, as they are at odds with Iran no less, in some ways even more, than Israel is.
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