ABSTRACT
The western view of Saudi Arabia as protector of its interests in the Organization of Petroleum-Exporting Countries (OPEC) price arena, together with the power of petrodollars, created new perceptions in the constellation of international relations. Outstanding among these was the alleged link between the supply and price of oil in the world and the part played by Israel in the Arab-Israel conflict, particularly with regard to the Palestinian issue. The Arab states were convinced that the combined power of oil and petrodollars would advance their side of the dispute. New winds have also been blowing on the international front and in the world oil market. Headlines in the western and even the Arab press have announced the demise of OPEC and the deflation of the oil myth. The chapter examines the thesis that the world is facing a new reality of constant oil surplus.
