Saudis Jack Up Oil Prices Through The Backdoor

Last Sunday Saudi Aramco announced it was reducing the discount offered for its medium and heavy grades of crudes. The reductions in the discounts will make Saudi crude oil less profitable to refine and should, other things being equal, lead to a reduction in purchases of Saudi crude. The cuts will, however, likely boost Saudi revenue -- the goal of every profit maximizing entrepreneur.

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Philip is right; the Saudis have out-smarted everyone. This ploy was sheer brilliance on their part and we stand back and applaud them for what they've been able to pull off. Oil prices sky-rocketed and will head higher still and the Saudis look not only blameless, they look like the good guys in the story.