Saudi Arabia Shifts Focus from Maximum Oil Exports to Strategic Leverage

Riyadh faces a paradox: full extraction capacity versus growing vulnerability in export routes. The East-West Pipeline reopened on September 22 after an eleven-day drone shutdown, but disruptions demonstrate that even this route is not immune to attack. Secure passage through Bab el-Mandeb also remains a concern.

The instinctive response is to restore exports quickly, but the Kingdom should reconsider its extraction and export policies. Treating oil as a non-renewable asset, rather than a crop, is crucial. Every barrel removed from the reservoir can never be replaced, and selling it too cheaply accelerates consumption of irreplaceable national capital.

The global market fails to account for permanent resource depletion and rarely compensates owners fully for surrendering barrels today. The Kingdom should not bear extraction, protection, and transport risks while increasing supply for consumers to pay less. Reducing exports gradually, with a long-term objective of reaching 2 million barrels per day at $250 per barrel, would be a safer path.

This approach would generate the same revenue as higher volumes but avoid substantial extraction, storage, transport, and insurance costs. The Mecca Pact-style land corridor connecting Saudi Arabia through Jordan and Syria to Türkiye could provide an additional route for crude oil, refined petroleum products, and petrochemicals. This diversification should support extracting less oil rather than accelerating exports of cheap crude.