We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Mon 7 Mar 2011 06:54 PM

Font Size

- Aa +

Oil may hit $200 if unrest spreads to Saudi - SocGen

Report says most extreme scenario would see barrel price of $150-200 on Middle East turmoil

Oil may hit $200 if unrest spreads to Saudi - SocGen
Oil may hit $200 if political unrest spreads to Saudi Arabia, it was said on Monday. (Getty Images)
Oil may hit $200 if unrest spreads to Saudi - SocGen
Oil may hit $200 if political unrest spreads to Saudi Arabia, it was said on Monday. (Getty Images)
Oil may hit $200 if unrest spreads to Saudi - SocGen
Oil may hit $200 if unrest spreads to Saudi - SocGen

Brent crude futures could hit $200 a barrel if political unrest spreads into Saudi Arabia, Societe Generale said on Monday.

North Sea Brent crude futures were trading about 60 cents higher at around $117 a barrel by 6pm Dubai time. US crude was around $105.70.

Brent crude has been hovering just below the $119 level hit late in February, its highest price since the third quarter of 2008, as the unrest in Libya has cost the country a loss of about 1 million barrels of crude production per day out of its normal 1.6 million bpd output.

Societe Generale listed some scenarios that could have an impact on oil prices, with its most extreme scenario showing Brent prices sharply high.

"Geopolitical Scenario 3: Unrest spreads to Saudi Arabia and threatens Saudi crude exports and any remaining spare capacity. Brent price range of $150-$200 a barrel," it said in its research note.

"In this most extreme, worst-case scenario for the oil markets, serious unrest spreads to Saudi Arabia. In this case, it does not really matter if Libya or any other producers are shut down or not. Saudi Arabia is OPEC's biggest producer and the world's biggest current holder of spare capacity," the bank added.

Saudi Arabia is the world's top exporter of crude oil, meeting about 10 percent of the global oil demand.

The kingdom has escaped major protests like those that toppled leaders in Egypt and Tunisia, but the wave of unrest has reached its neighbours Yemen, Bahrain, Jordan and Oman.

Saudi Arabia's council of senior clerics issued a statement on Sunday forbidding public protests, which the rulers of the US ally and key oil exporter fear could spread following demonstrations by minority Shi'ites.

Arabian Business: why we're going behind a paywall

For all the latest Saudi Arabia news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Real news, real analysis and real insight have real value – especially at a time like this. Unlimited access ArabianBusiness.com can be unlocked for as little as $4.75 per month. Click here for more details.
KeenObzerver 9 years ago

I think KSA has an authoritarian regime and citizens are deprived of many rights and freedoms, but this is offset by economic subsidies and free govt services to appease the population.
My main comment on what is happening is that banning protests is a political or security concern and should be kept within that frame.
WHY are "Saudi Arabia's council of senior clerics" issuing statements forbidding public protests ??!
WHY are the Saudi authorities forcing the religious establishment to issue statements that have nothing to do with their mandate.
Saudis are a religious people, and their Govt. shouldnt manipulate religion to suit their interests.

Telcoguy 9 years ago

Huh? Is this a serious question?
This is the foundational contract of KSA: the Saud family will protect the cleric s and give them free hand, and the clerics will support the Saud family. I seriously doubt the council has been "forced" in any sense. You could consider them as two branches of power (civil/administrative and religious)
They have been going on like this since the birth of KSA as a modern country.

Michael Rivero 9 years ago

The rising oil prices have nothing to do with the unrest in the Middle East. OPEC has stated that there is no shortage, and they will not allow a shortage, so the only reason oil prices are climbing is the collapse of the dollar coupled with oil company greed.