According to Saudi Prince Alwaleed bin Talal al Saud, the billionaire head of Kingdom Holding Co., Saudi Arabia is poised to limit the appreciation of oil to no greater than $100 a barrel.
“We can use our leverage, our excess capacity to be sure to pump more [oil] if needed so it will not impact the consumer countries while they’re getting out of their recessions slowly but surely,” the prince said.
As for Iran, he said it is important for the U.S. and other nations to put sanctions on the “renegade country” to force its government to negotiate. Issuing an ultimatum of war would push Iran to the “desperate move” of blocking the vital oil shipment waterway.
“I believe a solution is not impossible with them,” bin Talal said of Iran. “A dialog is the best way to do it.”
It seems that the House of Saud is willing to trade a guaranteed cap on oil price in order to protect the Strait of Hormuz, a shipping lane through which 20% of the world’s tanker transported oil passes. Although Alwaleed felt that if the Strait was closed by Iran, the US would have very little trouble opening it again. As the largest shareholder of Citigroup and a major investor in News Corp, Apple, and Twitter, Alwaleed has quite a bit of exposure to the US economy if the situation with Iran escalates.
via Saudi Arabia Will Not Let Oil Go Above $100: Prince – US Business News – CNBC.