What Saudi Arabia Can Do to Lead Again on Oil

In the wake of Monday’s historic plunge in crude-oil futures, Saudi Arabia issued a press release stating that it will “endeavor to achieve stability” in a market currently suffering from a disintegration of demand. For the kingdom, it is vital not only to raise the price of oil, but also to be a leader in the effort to do so.

With a struggling, one-dimensional economy, the Saudi monarchy needs higher prices to keep its political future secure. Moreover, the kingdom has long valued its image as the most influential force in oil, and it wants to return to a leadership position within OPEC and the markets. Riyadh cannot increase oil demand, but it can take steps to fix oil prices, protect the monarchy and return Saudi Arabia to a position of stabilizing leadership. This would require some tough decisions and sacrifices — perhaps more than the government is willing to make, and there’s a chance they could backfire. Nevertheless, here’s what Saudi Arabia could do: