Saudi Arabia's decision to scupper negotiations on a coordinated oil output freeze in Doha on Sunday seems to confirm a significant shift in its oil policy. For decades, it has insisted it does not wield oil as a diplomatic weapon, but at the weekend it did just that as part of an intensifying conflict with Iran.
The kingdom's position on Iranian oil production has steadily hardened over the last year and at the weekend it reached its logical conclusion. Saudi Arabia will not accept any constraints on its output, even freezing at record levels, unless Iran agrees to similar controls, which it has rejected until production has reached pre-sanctions levels.
By insisting on this hard-line position, Saudi Arabia ensured the talks would fail, and the kingdom seems comfortable with the outcome. Diplomatic strategy seems to have trumped oil market considerations. Saudi Arabia would rather have a lower oil price and lower revenues for all producers, including itself, rather than reach a production agreement that would deliver increased income to its arch-rival across the Gulf.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.