The People of America's Oil and Natural Gas Indusry

American Energy, American Security

Mary Leshper

Mary Schaper
Posted December 22, 2014

Why Saudis Decided Not to Prop Up Oil

Wall Street Journal:  In early October, Saudi Arabia’s representative to OPEC surprised attendees at a New York seminar by revealing his government was content to let global energy prices slide.

Nasser al-Dossary ’s message broke from decades of Saudi orthodoxy that sought to keep prices high by limiting global oil production, said people familiar with the session. That set the stage for Saudi Arabia’s oil mandarins to send crude prices tumbling late last month after persuading other members of the Organization of the Petroleum Exporting Countries to keep production steady.

Hard-hit countries like Iran, Russia and Venezuela suspected the move was a coordinated effort between the oil kingdom and its longtime ally, the U.S., to weaken their foes’ economies and geopolitical standing.

But the story of Saudi Arabia’s new oil strategy, pieced together through interviews with senior Middle Eastern, American and European officials, isn’t one of an old alliance. It is a story of a budding rivalry, driven by what Saudi Arabia views as a threat posed by American energy firms, these officials said.

Shale-oil production in places like Texas and North Dakota has boosted U.S. output, displacing exports to the U.S. from OPEC members and adding to global oversupply

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ABOUT THE AUTHOR

Mary Schaper is a Digital Communications Manager for the American Petroleum Institute. She previously worked on Capitol Hill for the Senate Energy and Natural Resources Committee as Digital Director and for Senator Lisa Murkowski. Before coming to D.C., she spearheaded digital strategy for Murkowski's successful Senate write-in campaign in 2010. Schaper enjoys traveling and taking in the local culture alongside her husband, their son and loyal springer spaniel.