One could be forgiven for thinking the world’s largest oil producer, Saudi Arabia, would applaud today’s high oil prices, but the kingdom’s oil minister is determined to help bring them down.

With political tensions in the Middle East now driving speculation buying, Saudi Arabia has revealed its impotence in controlling the situation.

In a column for the London-based Financial Times on 29 March, Ali al-Naimi said there was an “irrational fear” of a potential global oil shortage driving up the price of oil.

The value of the Opec daily basket price was consistently above $120 a barrel in March, losing 22 cents over last week to $122.25 on 29 March. The average Brent price has now been trading upwards of $100 a barrel for over a year.

Consistently high oil prices are driving the economies of Saudi Arabia and all other major oil-exporting countries in the Middle East, but Al-Naimi wants to reverse this trend “It is clear that sustained high prices are starting to take their toll on European economic growth targets,” says the oil minister. “No one benefits from a stagnating European economy and we want to do what we can to help encourage growth.”

He goes on to say Saudi Arabia wants to see a “fair and reasonable price”, but gives no hint on what level would be ideal. Saudi Arabia’s ability to boost or reduce crude production by great volumes makes it the linchpin of the global oil market, giving it a unique power to balance supply and demand.

The kingdom is expected to produce an average of 9.9 million barrels a day (b/d) in March and April, with the capacity to increase production to 12.5 b/d if required. But with Libya, Iraq and Angola moving to increase output and the US and Canada boosting production, the market does not need extra Saudi supply, al-Naimi said. He added that all inventories of Saudi oil around the world were full.

Despite its unique position, it seems even Saudi Arabia can do little to significantly reduce the price. Iran’s threats to close off the Strait of Hormuz – through which more than a third of the world’s seaborne oil shipments pass – has heightened fears of a potential global shortage.

Whether or not these fears are irrational, as the Saudi oil minister proclaimed, has little effect on the speculation buoying today’s $120-plus crude markets.