Why is Saudi Arabia worried about rising crude oil prices?

Crude Oil Prices: middle east Amid rising tensions in the world, the turmoil in the global oil market seems to be reaching its peak. On one hand, the sharp rise in crude oil prices has created profit opportunities for many oil producing countries, on the other hand, this situation has become a cause of concern for a big producing country like Saudi Arabia.

In fact, the situation is becoming such where oil prices may reach record levels, but despite this, Saudi Arabia is not feeling relieved. According to reports, if the ongoing conflict with Iran and supply disruptions continue for a long time, it could have a serious impact on the entire global economy.

On which model is Saudi Arabia working?

According to The Wall Street Journal report, Saudi officials are working on a worst-case model. According to this estimate, if the current crisis continues till the end of April, the price of Brent crude may go above $ 180 per barrel. This estimate reflects the increasing uncertainty in the market and the severity of the supply crisis.

Why worry for Saudi Arabia?

Although higher prices are generally beneficial for oil producers, Saudi Arabia is cautious about it. Excessive prices could reduce global demand and lead to economic recession. Omar Karim, an analyst at the King Faisal Center, said: “Saudi Arabia generally does not like oil prices to rise too quickly, as this creates long-term market instability.”

Why did the price increase?

A huge surge has been seen in the oil market since the war between Iran and Israel started on February 28. Attacks on energy targets by Iran and threats to ships in the Strait of Hormuz have affected supplies. This week, the price of Brent crude reached around $119 per barrel, while some benchmarks in the Gulf region have gone above $166.

Continuous increase in Saudi oil prices

Saudi Arabia is selling oil through its Red Sea route to Asian countries at the rate of about $ 125 per barrel. According to reports, prices may soon reach $138-140, by mid-April it may reach $150 and further rise to $165-180.