NOSELESS BUT SPITEFULL:

Are Saudis waging an oil-price war on Iran? (Robert Windrem, 1/23/07, NBC News)

Oil traders and others believe that the Saudi decision to let the price of oil tumble has more to do with Iran than economics. [...]

Moreover, the traders believe the Saudis are not doing this alone, that the other Sunni-dominated oil producing countries and the U.S. are working together, believing it will hurt majority-Shiite Iran economically and create a domestic crisis for Iranian President Mahmoud Ahmadinejad, whose popularity at home is on the wane. The traders also believe (with good reason) that the U.S. is trying to tighten the screws on Iran financially at the same time the Saudis are reducing the Islamic Republic's oil revenues.

For the Saudis, who fear Iran's religious, geopolitical and nuclear aspirations, the decision to lower the price of oil has a number of benefits, the biggest being to deprive Iran of hard currency. It also may create unrest in a country that is its rival on a number of levels and permits the Saudis to show the U.S. that military action may not be necessary.

Reducing their dependence on domestic oil is far more important than reducing ours on foreign.

Posted by Orrin Judd at January 24, 2007 8:06 AM