The High Cost of Keeping Arab Peace

In the past decade, when oil exceeded $100 a barrel, the Gulf’s oil producers went shopping. Abu Dhabi bought English soccer club Manchester City and New York’s iconic Chrysler Building, and Qatar acquired a stake in Porsche and bought British shopping emporium Harrods. Now priorities have changed. Members of the Organization of Petroleum Exporting Countries, poised to earn an unprecedented $1 trillion from oil this year, are investing in their citizenry. Gulf nations have pledged $150 billion to fund social programs and put a damper on public dissent, which led to the overthrow of rulers in Tunisia, Egypt, and Libya, and spread to Yemen and Syria.

These commitments give the petrostates plenty of incentives to prop up oil prices. According to BNP Paribas, Saudi Arabia and the Gulf states will need to keep oil at more than $80 a barrel to afford their promises.