It is only a few days since Prince Turki al-Faisal, the Saudi Ambassador to Britain, wrote an angry letter to The Independent. Terrorism, he insisted, poses no serious threat to the peace and security of the oil-rich kingdom despite the pessimistic tone of British media commentary. Prince Turki will no doubt be putting pen to paper once again in the next few days.
Yesterday saw the second al-Qa'ida-backed raid on the kingdom's oil infrastructure within the space of a month, with 16 killed, including one Briton, and a further 50 oil workers taken hostage. Despite the kingdom's repeated assurances, the episode will trouble analysts for some time to come.
Saudi Arabia is the leader of Opec (the Organisation of Petroleum Exporting Countries), it is the world's biggest producer and it is sitting on a quarter of the globe's oil reserves. It is no exaggeration to say that the health of the global economy rests on the maintenance of supplies from this one Middle Eastern state. The previous attack, which took place four weeks ago, may account for several dollars of the current price of a barrel of crude. The Saudi Oil Minister, Ali al-Naimi, was due to meet Western oil executives yesterday to offer reassurance.
The world oil markets are already volatile, with prices hitting $41 (£22.35) a barrel in the past few weeks amid fears that a major attack could disrupt exports. The price has risen from $30 in just five months, tracking the escalation of violence in Iraq almost exactly. According to Professor Andrew Oswald of Warwick University, oil prices at $50 a barrel would produce a world recession - although even this would not match the soaring prices of the 1970s.
http://news.independent.co.uk/world/middle_east/story.jsp?story=526361
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