Saudi Arabia has elected to pump more crude oil. The decision, to be announced this weekend at a summit in Jeddah with consuming nations and international oil groups, will test Riyadh’s power to move the market. With crude surging to record highs of almost $140 a barrel, the increase in Saudi output is a welcome – and necessary – step if prices are to fall. But, on its own, it is unlikely to reverse supply tightness and its effect on inflation.

That the kingdom has signalled it will try to bring prices back under control is a modest diplomatic victory for the US and other consuming countries. It is an admission by the Saudis that they were partly to blame for the run-up in the first place. Riyadh’s insistence that market speculation and a lack of refining capacity accounted for high prices ignored the impact of its own recent policy of cutting supplies to drain world oil inventories.