On High Oil Price: Saudi Have Fears

Saudi Arabia, one of the leading oil reserves in the world, has benefited the sky-high oil price, since it has a positive impact on its economic development. But, high oil price is also a threat to its economic development. Why? simply, because high oil price could hasten the development of renewable energy that might displace petroleum of Saudi Arabia.

Still, some leading energy and Middle East experts perceive a Saudi shift towards greater acceptance of high prices amid surging demand from China and other developing economies. Next to these new sources of demand there is diminished concern about high prices creating greater incentives for competing sources of energy.

"Many years ago, before the demand side of the equation became so dominant, the view that if prices were lower, alternatives could not survive was accepted," said James Oberwetter, former U.S. ambassador to Saudi Arabia. "But the dawning of these huge new markets has really dimmed the prospect for lower prices."

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