TheStreet.com, a website focused on the world’s economic markets, takes a look at how the global petroleum markets have more influence on the US economy than does the US Federal Reserve. The article looks primarily at Saudi Arabia because it is the ‘swing producer’ of oil, able to tweak the oil market by the over- or under-supply of oil. The article, though it creates a bit of a bogeyman of Saudi Arabia, offers a good primer on how the oil markets work, where they are vulnerable, and why it is in the best interests of Saudi Arabia to moderate prices. Definitely worth reading.

How Saudi Arabia Is Running Our Economy
Jim Jubak

Saudi Arabia is running the U.S. economy.

I’m not sure the Saudis want the task, but they’ve got it. Because the U.S. still doesn’t have a national energy policy, we’ve thrown decisions about how fast our economy grows and whether our standard of living rises or falls into the hands of Saudi Arabia’s oil ministry.

That’s risky, since the economic self-interests of Saudi Arabia and the U.S. aren’t always aligned, and because keeping the fractious and often dysfunctional governments of the world’s oil producers on the same economic course is a whole lot harder than building consensus among the governors of the Federal Reserve.
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