Why would anyone sell seven widgets for $50 a widget (total revenue: $350) when they could sell six of the widgets for $100 per widget (total revenue: $600) and just keep the seventh widget in a garage to sell later? No rational person would do this, unless there were other considerations at work. Yet this is precisely the current situation with Saudi oil exports. Few people doubt that Saudi Arabia could have held oil prices in the $100 per barrel range by cutting exports to six million barrels per day (bpd) as it did previously on several occasions over the past three years. Instead, Saudi oil exports have remained in the seven million bpd range. This together with weak demand in Europe and Japan (two of […]