September 10, 2007
The Saudi’s silence
When Ali Naimi, the Saudi Arabia oil minister, talks, the oil market moves. But Mr Naimi, the most influential Opec minister, has remained silent for the last five weeks and has said nothing so far in Vienna in the run-up to Tuesday’s Opec meeting.
The silence is raising eyebrows among the analysts and consultants that gather here in Vienna for the meeting. They are perplexed by the Saudi tactics and are agonising over their coffee at the ministers’ hotels in the Austrian capital looking for some new development to tell the oil traders in London and New York.
This morning, at Mr Naimi’s briefing – which involves journalists, including me, jogging with the minister at 7.30am – it was silence again. Not a single word on Opec’s policy.
Some analysts think Mr Naimi is waiting to surprise the market – and Opec colleagues – in a tactic used several times in the past.
Those who support this theory say that Saudi Arabia may push the oil cartel for an output increase to cool-down red hot oil prices. As most countries oppose the move, Saudi would be quietly trying to convince others on the need of the increase, the analysts said.
Others say that the Saudi silence is due to the desire of the kingdom to maintain a low profile in the Opec meeting as oil prices approach $80 a barrel.
These analysts argue that the last thing Mr Naimi wants, is to be seen in Washington, especially in the midst of the subprime crisis, as responsible for higher crude and petrol prices. Those who support this theory say that Saudi Arabia would not push for a production increase and, that in fact, the kingdom is satisfied with the current oil price and market.
