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Riyadh's Oil Play

Why the Kingdom is Keeping Prices Low

King Abdullah at his private residence in Jeddah, June 2014. Brendan Smialowski / Courtesy Reuters

On Monday, a Saudi general and two border guards died in a shootout along the Iraqi–Saudi Arabian border with fighters thought to be members of the Islamic State of Iraq and al-Sham (ISIS). The attack—the first against Saudi Arabia since it joined the U.S.-led coalition against ISIS—came amid uncertainty both at home and abroad, over questions surrounding the health of 90-year old King Abdullah, who is in the hospital battling pneumonia, and over the global price of oil.

Oil prices recently dipped below $50 per barrel for the first time since May 2009. Observers have attributed the drop to both an increase in supply, resulting from the shale revolution in the United States, and a decrease in demand, owing to sluggish global growth. All eyes have been on the Kingdom, a leading producer in OPEC, which accounts for roughly 73 percent of the world’s proven oil reserves,

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