When the Saudi pat us on the head and pledge to “ensure adequate supply” of oil to global markets, that doesn’t mean everything is OK. The Saudis are excellent capitalists, and like to squeeze the world for every dime on a barrel it can get — without squeezing us dry. If oil prices rise too far, too fast, then the economy shuts down — and demand goes down the toilet.
And ask any Saudi prince: It ain’t cheap bringing in chartered jets full of scotch. They need our economy to stay healthy.
So the message I take away from the story is that the Saudis are afraid that our recovery hasn’t really gained much momentum, and that we’re just one oil shock away from taking a ride on the Double Dip.