(Posted by John.)
So a few days ago, Saudi advisor Nawaf Obaid "threatened" to lower oil prices:
[King Abdullah] may decide to strangle Iranian funding of the militias through oilpolicy. If Saudi Arabia boosted production and cut the price of oil inhalf, the kingdom could still finance its current spending. But itwould be devastating to Iran, which is facing economic difficultieseven with today's high prices.
Just one problem: King Abdullah probably can't increase oil production, at least not enough to make a difference.
Say it with me, slowly: There is no supply-side solution. The only way to lower the price of oil is to reduce demand. CAFE standards, taxes, whatever. Start pulling all the levers.
