Friday, April 4, 2014

Shale Gas Helps Fracture U.S.-Saudi Ties

"... If the oil price stays high, not only will hydraulic fracking continue to be profitable in the United States, but a number of other countries around the world may start using the technology. The European Union is considering whether to allow fracking and, if so, under which conditions to prevent negative effects on the environment. With a higher the oil price, marginal producers are more likely to enter the arena, undermining Saudi Arabia's position. If the US starts to export crude oil for the global market, it will be a major new player politically and economically, and could make the existing institutional structures like OPEC obsolete, edging the Saudis away from the center of oil diplomacy.Common interest in the oil price underpinning a US- Saudi understanding is no longer in place; on the contrary, a conflict of interest is apparent.
Seen from the outside, the Saudis have tried to communicate their displeasure to the US, maybe trying to wring another kind of understanding out of the wreckage. This was done explicitly and publicly in October 2013 by Saudi Arabia's former spy chief and ambassador to the United States, Prince Turki al-Faisal, at the annual Arab-US Policymakers Conference.The signals ran into a US stone wall. Unless gaps in policies and perceptions are bridged, prospects for future stability of the Middle East do not look good."

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