Saudis are rethinking oil production stance
Pressure from the United States and fears that soaring energy prices are hurting the global economy have forced Saudi Arabia to consider significantly boosting oil production.
The Saudis are contemplating a “sizable additional increase” in oil production, according to the Middle East Economic Survey, a weekly newsletter focusing on the region’s energy strategies. An announcement on possible measures to bring down the price of oil, which has reached nearly $140 a barrel, is expected this month when King Abdullah meets with oil producers and consumers in the Red Sea city of Jidda.
In May, the king rejected President Bush’s plea to make more oil available, saying that markets should dictate production levels.
But costs have since dramatically climbed. Saudi worries about a global economic slowdown and fears that escalating prices would compel countries to develop alternative sources have led to a shift in Saudi thinking.
On Saturday, finance ministers for the Group of 8 major industrialized nations -- the U.S., Germany, Britain, France, Canada, Japan, Italy and Russia -- urged oil-producing nations to increase production.
Rising prices have shaken the world. In the U.S., the average cost of gasoline has climbed to more than $4 a gallon. India, Indonesia and other Asian nations have cut fuel subsidies, creating anger and panic among drivers.
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-- Jeffrey Fleishman
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