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People walk past a banner showing Saudi King Salman and Crown Prince Mohammed bin Salman People walk past a banner showing Saudi King Salman and Crown Prince Mohammed bin Salman outside a mall in Jeddah, Saudi Arabia, Mar. 7, 2020 (AP photo by Amr Nabil).

Why Saudi Arabia’s Crown Prince Tanked Oil Markets

Thursday, March 12, 2020

With the global economy already teetering as the result of the coronavirus outbreak that is now officially a pandemic, Saudi Arabia’s young and powerful crown prince, Mohammed bin Salman, has risked pushing the world into recession by firing a shot directly into the oil markets. It was a trademark move by the prince, known as MBS, who has shown he can be brazen and ruthless—and occasionally self-destructive—when he’s determined to get his way.

On Sunday night, MBS announced that Saudi Arabia would sharply increase its oil output despite a steep decline in global demand. It was precisely the opposite of what oil producers normally do, and it worsened an existing slump and immediately triggered a wave of panic selling across already-anxious markets around the world. Oil prices fell by an incredible 30 percent as markets opened Monday, and by the time the markets closed on Wall Street, major indexes had experienced their deepest losses since the global financial crisis a dozen years ago. ...

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