Abdulateef Al‐Mulhim
Commodore, Royal Saudi Navy (Retired)
Discussions and speculations about the Saudi energy sector never cease to stop. After a brief lull, the issues jump to fore for one reason or another. Even during the period of relative quiet, the issue always plays in the minds of analysts and the powers that be. Never mind Ukraine’s delicate cease-fire, never mind that threats of WWIII looms, never mind the terrorism threat to world stability and never mind the possible downfall of the euro and the collapse of the European Union. It is the Saudi oil policy and strategy, which always remain talk of the town. Everybody around the world is apparently obsessed with few questions about Saudi Arabia: What is going around at the Saudi oil wells? Why Saudi Arabia is not reducing its oil production? What are the economic or political reasons that shape the Saudi energy policies and why does it matter for the world what happens at the Saudi oil wells? During the late 70s, when I was studying in the United States, our class was assigned to write about maritime industry and oil tankers operations. Many of my classmates wrote about containerization and containership. To my surprise, our instructor asked if I could write about the Organization of Petroleum Exporting Countries (OPEC). So the next day, I contacted Saudi ARAMCO office in Houston and few days later I was supplied with some relevant material. There is no need for me to mention that my papers were mostly about Saudi oil production and the massive oil installations and facilities in the Kingdom. And ironically, since that day, I have noticed that the talk about Saudi oil production, consumption and energy policy has always remained a hot subject and many people make money just writing about it. The trend continued during the 1970s oil crisis, during the Iraq- Iran war, during the Iraqi invasion of Kuwait and now during the era of the so-called Shale Oil when the world saw the price of oil dipping from more than a $100 a barrel to less than $50. And when the world was expecting a higher oil price because of the Libyan total shutdown of its oil facilities, unstable Nigerian oil production and Iraqi unstable rate of oil production, the price of oil simply went down. At a time when the world was watching the Saudi oil production and the possibility of a drastic Saudi decrease in its oil production, the Saudis announced that the level of production would remain the same. The bottom line is that, since the 1970s, I have not seen any oil analysis who has been even close to reality about the Saudi oil. Saudi oil well is an enigma to any oil expert. Many around the world came to the conclusion that no one really knows what goes on in the Saudi oil business except a very tight small circle that does not talk to the outside world. It is Saudi oil and it is Saudi business. At the end of the day, it is the Saudi oil policies that are very trusted around the world and what the Saudis are doing regarding the oil policies always make a difference. And to this day, many oil experts still don’t know if the Saudis really kept the level of oil production or simply decreased it and no one outside that tight circle knows about it. To me, Saudi oil well was and still is an enigma that I will never understood. Written by Abdulateef Al‐Mulhim. Speculating About Saudi Oil Policies reprinted with permission of Arab News and Abdulateef Al‐Mulhim.