Iran-Saudia tension and oil price!

One of Mitchell’s most compelling claims is that “the infrastructure of oil” was also “the infrastructure of political protest” (103). But his explanation of why workers’ political agency on Middle Eastern oil plants and along pipelines was weaker than that of Europe’s coal workers does not scrutinize the infrastructure itself. Instead, he tells us more about companies’ use of “machine guns and armoured cars” (104) to fight strikes, British and U.S. support of Zionism as well as CIA involvement in the overthrow of governments (104-5). We also learn about strategies of racial segregation to “inhibit labour organising and political action” (106). And in chapter seven Mitchell offers an analysis of how the energy crisis in the early 1970s was entwined with the U.S. efforts to prevent solutions to the Palestine question. But throughout these chapters, we learn surprisingly little about why the material properties of oil and its infrastructure matter. One of the problems in the Middle East is governments, especially Saudi Arabia, playing with oil price to manipulate the power balance in their own favor. It is doable for them since they have a very rich country in addition to other Arab nation's support. There is always tension between Iran and Saudia for different reasons and whenever Iran is in need Saudia managed to crash prices to blemish Iran.

OPEC, the world's leading group of oil exporters, this week declined to slash production, disappointing countries, such as Iran, that would like to see oil prices climb amidst a worldwide glut of oil and natural gas. The group's decision to maintain its level of output was led by Saudi Arabia, which somewhat mysteriously is keen to keep prices low.

Liam Denning at The Wall Street Journal wishes that Saudi Arabia's move may be part of its ongoing rivalry with Iran over influence in the Middle East:

Saudi Arabia’s chief antagonist is fellow OPEC member, and main geopolitical rival, Iran. Lower oil prices squeeze Iran’s finances and capacity to oppose Riyadh’s aims in regional war zones such as Syria. As an added bonus, lower oil prices also hurt non-member Russia, another antagonist. [The Wall Street Journal] 

Partly as a result of this feud, Denning says that oil prices, currently below $70 a barrel, could remain below the triple digits for years.

http://money.cnn.com/2016/01/19/investing/saudi-arabia-oil-prices-iran/