The Change Mariner: Shaking The Timbers Of The House Of Saud

May 14, 2004

Shaking The Timbers Of The House Of Saud

It is dawning on everyone who does business with the kingdom that the Saudi government is locked in a long, vicious struggle with Islamic militants that threatens to send wave after wave of jitters through the oil markets and shake the timbers of the House of Saud.
Oil prices hit 13- year highs of almost $39 per barrel on May 4 as traders panicked about the possibility of disruptions of shipments from the world's largest exporter. With only 2 million to 3 million barrels per day of spare capacity in the world, any disruption of Saudi crude flows would send prices into the stratosphere. A mass exodus of Western oil technicians could also have a long-term impact on the Saudis' ability to manage their industry.

Saudi oil officials say the worries about supply outages are exaggerated and that their facilities can function in the toughest environments. "It's going to take a lot more than people running around shooting AK-47s to disrupt our operations," says Sadad Husseini, who recently retired as executive vice-president for exploration and production at Saudi Aramco. But traders aren't listening. "If something happens in Saudi Arabia, the futures markets are going to react swiftly and upward," says Adam Sieminski, an oil analyst at Deutsche Bank in London.

House of Bush, House of Saud: The Secret Relationship Between the World's Two Most Powerful Dynasties
Scribner

Amazon Price: $16.38

Against All Enemies: Inside America's War on Terror
Free Press

Amazon Price: $17.01

Worse Than Watergate: The Secret Presidency of George W. Bush
Little, Brown

Amazon Price: $15.61

American Dynasty: Aristocracy, Fortune, and the Politics of Deceit in the House of Bush
Viking Books

Amazon Price:

E-mail This Story