Oil-producing countries and moderate pricing policy
Twice, in 1979-81 and in 1985-86, Saudi Arabia was the oil-producing country that pursued an active, even aggressive, policy designed to shape the global oil market. In the first round, oil prices went up three-fold, though not further, thanks to Saudi efforts. In the second instance, to recapture lost market share, Riyadh instigated a price war that resulted in a severe drop in prices. Saudi Arabia could fill this role because of its unrivaled position in the world oil market, one that resulted from a combination of factors: huge production capabilities, a moderate pricing policy, the size of its reserves, and its relations with the West.