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Opinion
Julian Lee

Saudi Arabia's Best Bet Is to Crash the Price of Oil

Market management just isn’t working. Instead of supporting oil prices, the kingdom’s output cuts are propping up higher-cost rivals.

Half full, or half empty?

Half full, or half empty?

 

Photographer: Simon Dawson/Bloomberg

Saudi Arabia should give up trying to manage the global crude market and return to the pump-at-will policy it briefly adopted in 2014 under its longest serving oil minister Ali Al-Naimi.

In the mercantilist world in which we now live, where decisions are based on narrow national interest, it makes no sense for the world's lowest-cost oil producer to subsidize shale and prop up other high-cost suppliers.