Oil prices and Saudi Arabia’s perennial Goldilocks problem

Oil prices and Saudi Arabia’s perennial Goldilocks problem:

"Saudi Arabia faces a familiar conundrum. How does it prop up prices enough to bolster the kingdom’s economy but not so much that it backfires? As oil prices shoot above $71 a barrel, Saudi Arabia’s perennial “Goldilocks” problem is front and centre.

The previous era of oil prices above $100 a barrel helped spur investment into expensive production — from Brazil to Canada and the US. It also hurt consumer demand and drove the world towards alternative energies. A return to this scenario was seen by Saudi officials as a bad idea.

But today, the world’s largest oil exporter is undertaking the biggest economic and social reform programme in decades and it needs crude prices and revenues to help it diversify. But how much higher— $75, $80, $85 or an even greater level?"



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