Why Saudis are holding out on low oil prices
Staying the course is aimed at projecting strength and confidence at a time of extreme volatility in Middle East, but this policy won't be for the long run.
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A CONSENSUS has emerged since the death of King Abdullah of Saudi Arabia that the kingdom will not change course on oil policy. This consensus is probably right, at least for the short term. It is, however, correct for reasons other than the ones that most observers have invoked.
Moreover, while it looks unlikely that the kingdom will alter oil production in the coming months, barring a major change of heart of non-Opec (Organization of the Petroleum Exporting Countries) producers, interesting changes to Saudi Arabia's Cabinet roster and other energy policies could be closer than most realise.
The basis of the conventional wisdom is rooted in personalities. New King Salman bin Abdulaziz has pledged continuity, stating he will adhere to the "correct policies" of his predecessors. He also said that Oil Minister Ali Al-Naimi will stay in his post.
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