The oil balance is back on precarious footing. The shift of events in Yemen — President Ali Abdullah Saleh seems to be spending his final hours or days in office (see defectors above) — returns instability to Saudi Arabia’s doorstep, and with it may push oil prices higher.
It’s not that Yemen itself produces much oil or natural gas – its production volumes are modest. But its northern border with Saudi is porous, and as we’ve discussed previously, any flow of Yemeni refugees, including armed ones, could destabilize Saudi Arabia. To the east of the kingdom, Saudi forces are helping to tamp down unrest in neighboring Bahrain, but meanwhile face new protests from sympathetic fellow Shias in the city of Qatif, in Saudi’s oil-rich Eastern Province. All of this will tempt the trigger fingers of intrepid traders in London and New York.
Oil prices have been relatively calm considering the upheavals in Tunisia, Egypt, Libya, Bahrain and Yemen, not to mention the nuclear crisis in Japan, moving up and down just a few dollars when traders decide they’d like to earn a little money. When prices have moved the most, it has been with an eye on Saudi Arabia, whose massive oil reserves and production underpin global price stability.
Read it all.
Steve LeVine–Back to Saudi's fault lines
The oil balance is back on precarious footing. The shift of events in Yemen — President Ali Abdullah Saleh seems to be spending his final hours or days in office (see defectors above) — returns instability to Saudi Arabia’s doorstep, and with it may push oil prices higher.
It’s not that Yemen itself produces much oil or natural gas – its production volumes are modest. But its northern border with Saudi is porous, and as we’ve discussed previously, any flow of Yemeni refugees, including armed ones, could destabilize Saudi Arabia. To the east of the kingdom, Saudi forces are helping to tamp down unrest in neighboring Bahrain, but meanwhile face new protests from sympathetic fellow Shias in the city of Qatif, in Saudi’s oil-rich Eastern Province. All of this will tempt the trigger fingers of intrepid traders in London and New York.
Oil prices have been relatively calm considering the upheavals in Tunisia, Egypt, Libya, Bahrain and Yemen, not to mention the nuclear crisis in Japan, moving up and down just a few dollars when traders decide they’d like to earn a little money. When prices have moved the most, it has been with an eye on Saudi Arabia, whose massive oil reserves and production underpin global price stability.
Read it all.