Time was when Saudi Arabia was so powerful that it could command the future, or at least the future of the world economy.

People would hang on Sheikh Yamani’s every word as if the legendary Saudi oil minister were some kind of Pythia, the Oracle of Delphi.

With the merest flick of the eyebrow he could send the oil price either soaring or plummeting, and with it the fortunes of the West’s advanced economies.

Not any more. The Organisation of the Petroleum Exporting Countries (OPEC), which has always had Saudi Arabia as its de facto leader, has long since lost much of its discipline, power, and influence – and judging by the events of last weekend is these days pretty much a busted flush.

You could tell things were about to go badly wrong when Bloomberg and Reuters were summarily banned from access to proceedings at last week’s meeting in Vienna.

To ostracise the press is never a good look and almost invariably signals an organisation on the back foot or otherwise in terminal decline.

Saudi’s current energy minister, Prince Abdulaziz bin Salman, is said to be acutely unhappy with the press for not giving sufficient column inches to his view that the oil price should be much higher.

Maybe the pesky hacks will learn their lesson now that they are frozen out – not.

No doubt there have been other such bans, but in recent decades it is unheard of. Also virtually unheard of is for Saudi Arabia to go it alone in cutting production – even as at least one other member of Opec is about to increase it – and for said cut to have virtually no effect on the oil price.

Mock up of one of Saudi's ambitious megastructures, the desert city Neom – NEOM/AFP via Getty Images
Mock up of one of Saudi’s ambitious megastructures, the desert city Neom – NEOM/AFP via Getty Images
It’s quite a gamble, because the oil price does indeed need to rise by a considerable margin to cancel out the negative effect on Saudi’s overall revenues of the cut in production.

Neom and other such vainglorious plans for castles in the sand are extraordinarily ambitious – and expensive – endeavours; Saudi needs all the money it can get.

The kingdom’s actions in committing to a cut in production have therefore left everyone guessing.

The most widely held view is this. Conscious that its greatest asset, oil, will as a result of the global response to climate change eventually be on a declining trajectory, Saudi has determined to exploit it as fully as possible while it still can, maximising the proceeds for as long as possible.

The higher the price the better, sod the world economy. That there are other beneficiaries of high oil prices, such as Putin’s Russia, is by the by, and just an unfortunate side effect of Saudi acting in its own interest.

Also unfortunate is that the higher the oil price, the greater the depressing effect on Western economies. That’s their lookout.

Opec as a stabilising influence in the world economy, adjusting production to keep prices on an even keel, has had its day, and it’s everyone for himself.

Who knows what’s really going on; as I say, much of the press was banned.

But I’m not so sure the above narrative is entirely correct. I wouldn’t put too much store by the headline grabbing news from the International Energy Agency that global investment in clean energy technologies is now significantly outpacing new investment spending on fossil fuels.

This has been the case for some years now, but it hasn’t much tempered the flow of new investment in oil, gas, and coal, which despite the disincentives continues apace, and is now close to pre-pandemic levels.

In any case, Saudi Arabia has long been of the view that oil has a lot more life in it than people think, or in other words that net zero is still a very long way off, with many more decades of profitable runoff in fossil fuels to come.

If that’s your outlook, you don’t cut your production, but instead try to sustain your market position by making it as cost competitive as possible.

If, on the other hand, the world economy is slowing – and there are lots of signs of that, particularly in China, where the economic news is increasingly grim – it’s not going to need today’s levels of production for much longer, and it therefore makes sense to cut back so as to maintain the present price.

I think that’s probably the best interpretation of what’s going on. Whether it will work or not is another matter.

What’s for sure is that the geopolitics of oil has shifted dramatically over the past decade or so. The brutal murder of Jamal Khashoggi by a gang of Saudi agents in Istanbul five years ago was perhaps the defining moment, but Saudi’s pivot away from the US towards China had in fact begun some years previously with the advent of the American shale revolution.

This has made the US self-sufficient in hydrocarbons, and therefore no longer beholden to supplies from the Middle East for affordable energy. So Saudi Arabia has turned towards Asia instead.

There may admittedly be an element of fellow despots cuddling together for warmth; Saudi’s refusal to increase production so as to help the West wean itself off Russian supplies certainly compounds the view that it is being deliberately unhelpful.

Geopolitically, Saudi Arabia seemed to be repudiating the West and siding with China and Russia instead.

Saudi Arabia's Mohammed bin Salman – AP Photo/Susan Walsh
Saudi Arabia’s Mohammed bin Salman – AP Photo/Susan Walsh
But this is not primarily a despotic thing. Mainly it’s about a much deeper snub – that of America not needing Saudi any longer, and therefore feeling free to freeze the kingdom out of the Western club in punishment for the Khashoggi affair.

Once courted on all sides, Saudi has found itself left out in the cold.

Joe Biden’s predecessor, Donald Trump, did of course take a rather more forgiving attitude to Khashoggi’s murder. Like Boris Johnson in the UK, Trump developed a real rapport with the Saudi crown prince, Mohammed bin Salman.

Bountiful arms contracts were meant to flow by way of reward. That all went down the pan with the deep freeze in relations that has prevailed since Biden became president. Very recently, there’s been a half-hearted attempt by the US to rebuild bridges, but so far to little effect.

As for Britain, we’ve done the usual thing; half-hearted condemnation in combination with continued cooperation for security and market access purposes. Saudi is still an important export market for the UK.

Saudi Arabia will no doubt remain an important player on the world scene for a long time to come, but its claim to be a stabilising influence in oil markets and therefore the world economy no longer applies.

Saudi Arabia has modernised at impressive speed in recent years, but geopolitically, it is just not the force it was, either individually or within Opec.