Apparently it is not enough that the U.S. and other Western nations import scads of oil at a cost of billions of dollars a year. Saudi Arabia is now proposing that they be paid for any revenues lost while combating global warming. (They say they need the cash in order to diversify their economy. I am kind of wondering what happened to the hundreds of billions they have received in the past fifty years.) This time, they claim it is a make-or-break proposition. Since it is unlikely that importers will be willing to pay both for new clean energy production and the Saudis for lost revenues, if they are serious about this position we could see a lot of volatility in oil prices-maybe even an embargo-while the dispute gets resolved. Other countries are sensing that the U.S. is economically vulnerable right now and are quite willing to push for concessions that they wouldn’t have considered a few years ago. Investment plans will need to incorporate these new uncertainties along with the normal risks of investing.
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