'Saudis interested in keeping oil price at $50/bl'

Saudi Arabia, which benefited immensely from record oil prices last year, has sent signals in the past two weeks that it is committed to keeping oil at around $50 a barrel, down $27 a barrel from the summer peak that shook consumers across the developed world.

The Saudis appear to be rediscovering that painfully high energy prices take a profound toll on the global economy, which in turn reduces demand for their oil. But other motives seem to be at work, too, including the Saudi's desire to restrain Iran's ambitions in the region, the New York Times said.

Although Saudi officials say their oil policy is based on market considerations and not political ones, the Times said there was speculation that the kingdom might be tempted to dry out Iran's ambitions by pushing oil prices down.

Prices have already been falling because of mild weather and slowing demand. High prices, the paper noted, have also emboldened rivals within OPEC, among them Iran and Venezuela, which have used their oil revenue to prop up their governments and export their more radical agendas.

Saudi Arabia has worked cooperatively with Iran since the late 1990s, when oil producers were panicked by the decline of prices to around $10 a barrel. More recently, Iran has favoured rising prices over the moderation that Saudi Arabia seeks, the Times said, adding that Venezuela also tends to favour higher prices but wields less political influence in the cartel.

"High prices are not in the interest of Saudi Arabia," Sadek Boussena, a former OPEC president from Algeria, was quoted as saying.