Posted on 06/21/2008 9:39:31 PM PDT by TigerLikesRooster
Why Saudi Arabia's King Wants to Dampen Oil Prices By Bernhard Zand
Consumers aren't the only ones being hit by high oil prices. Now that the oil shock has reached producing countries, Saudi Arabia has called a crisis summit this weekend in an effort to find concerted solutions that could push barrel prices down.
Others would be overjoyed to be earning a $1 billion a day, and to have good reason to expect that number to climb to $2 billion a day next year.
But Abdullah bin Abdulaziz al-Saud seems less than thrilled these days, and the newly tense atmosphere at the Saudi Petroleum and Natural Resources Ministry in Riyadh is a reflection of his mood. Early last week, the Saudi king decided that enough had been said about the oil price, and that it was time for action. He invited the world's petroleum elite to attend a meeting at his summer residence on the Red Sea, and this time he wants everyone on the list to attend: the heads of state and relevant cabinet ministers of oil-producing countries and the biggest oil consumers, the heads of ExxonMobil, Shell and Gazprom, and bankers from Merrill Lynch, Citigroup and Lehman Brothers. The meeting, to be held at the Royal Palace on the Corniche in Jiddah, Saudi Arabia, is scheduled for June 22.
(Excerpt) Read more at spiegel.de ...
(1) It could spur concerted efforts to cut dependence on oil as prime energy source.
(2) It could weaken the political power of environmentalists, allowing oil exploration in areas which have been off limits, which could undercut their clout in world oil market.
Ping!
Opec president rules out any hike in oil production (Democrats still against Domestic Drilling)
3. Long term, might result in actual political and military shifts to control the largest oil resources.
The Saudis learned in the oil crisis of the 70s that it is in their long term interest to provide oil at reasonable rates, which in their view is the highest rate at which the world will not begin developing alternatives to Saudi oil. This has now been crossed, and it is out of their hands to control the prices now.
The 82nd from above, a couple of Marine divisions from the Red Sea and Persian Gulf, and Viola! Billions of gallons for Joe Sixpack & Suzy Soccer Mom. Who could stop us? LOL
At the current rate of things...it wouldn’t take more than two or three years for people to start considering their other options. For example...the guys who live 80 miles from their job site...might just decide it’d be better to move within twenty miles and cut out that 120 miles of driving per day, thus saving four to five gallons a day ($20).
The companies who regularly send employees to conduct site visits...might just go to teleconferencing. The $6 million they spent each year on airline travel cut down to $1 million.
The RV crowd? They might decide to just park the RV in one location and stop driving the thing...thus saving $5k a year in gas cost.
Dad might decide to skip buying Junior a car at 16...offering him one at 18 instead. Junior might start riding the school bus again which would save the family $1500 a year in gas cost that Junior used.
Europeans might decide that airline costs are too much for their yearly exotic vacations...thus staying closer to home.
The US military just might buy into the blimp development game, and dump its cargo planes for blimp transport...which would save on fuel costs.
Someone might accidentally discover the cost of transporting goods from China to the US...is fairly significant. But transporting from Mexico to the US would be cheaper...so they start building more factories in Mexico, thus cutting more fuel usage.
And somewhere down the road...is the hydrogen vehicle. The odds of one in your local town by 2012...almost zero. But by 2020...there might be a fair population of hydrogen stations thus allowing the population to have more of these cars.
The Saudis lose in the long run. No one will pay $12 a gallon for gas...we’d go bankrupt.
And Hashemites get to rule Mecca again. Saudis go back to their Bedouin existence. Wahabi-sponsored schools, Mosques, terrorist cells lose their funding.
it will also hurt their investments abroad in nations like us that import their oil
the return on those investments is paramount to the sale of daily crude....especially in the long run
The REAL threat is that we Americans will treat this the way we did shooting for the Moon ... if we as a national people determine to become energy independant, NOTHING the Arab goons can do will stop US! And that takes the number one consumer out of their markets in the next decade, because it would take US no more than ten years to accomplish this task if the demcorap party would stop their service to the enviro wackos and Sorosesque commies as an empowerment scheme for democrats. If the democrap obstrauction continues at present pace, millions will starve int he next decade due to the lack of feretilizers and fuel for our world-feeding farmers. NO ONE in media will address this FACT.
That might have a bit of an effect on some Mexicans choosing to stay in their own country instead of crossing our border illegally.
I meant to write ‘obstrauction’ but i didn’t mean to put that extra “e” in fertilizers. That just stinks don’tchaknow
It could spur the United States to put him and his stinking regime on the terrorist list where he should have been long before.
High prices are making America get serious about a real energy policy, like drilling.
Pray for W and Our Troops
4) Maybe they are afraid we will charge them the same for a bushel of corn as they charge us for a barrel of oil.
(hefty export tax to OPEC countries who do not grow their own food )
If we pass legislation for drilling they will lower that price.
The Saudis also have much of their money invested in the U.S. It would be the last thing they want to damage the economy!
I work from home and my wife and stepson work about 1,000 feet away at the mall. The grocery store is maybe 2 miles down the street. Thank goodness, because my car is a diesel!
Yeah, Halliburton and Blackwater. LOL
That makes very little sense. All it would take is a few IED's detonated at key infrastructure points to prevent oil from getting to market. Ever wonder why the middle eastern members of OPEC can't build pipelines to send natural gas to markets in Europe? They are after all connected to Europe by land.
Also the Saudis have a tremendous amount of money invested in the west. They are depending on those assets for the future of their country after the oil runs out. If the world economy tanks, so does the value of their investments. That in turn puts their own future at risk.
“heads of state and relevant cabinet ministers of oil-producing countries and the biggest oil consumers, the heads of ExxonMobil, Shell and Gazprom, and bankers from Merrill Lynch, Citigroup and Lehman Brothers. The meeting, to be held at the Royal Palace”
sounds like a newer version of the “time-honored” Bilderberg yearly conference.
“and it is out of their hands to control the prices now.”
I’m afraid it’s not - at least not yet. Have you been listening to all the spoiled brats in our legislative branch fighting and agreeing on nothing? once again, nancy pelosi’s and harry reid’s tribes.
That is exactly what is going to happen. In 1986, oil was $26 a barrel, down from $34. The American Oil Industry spent a ton of money to gear up for oil shales. Then Opec dropped the price of crude to $8 per barrel for a year and wiped out the resource plays in the US (and also wiping out a lot of domestic companies.) The will not let us become sufficent unless the American people allow it—i.e. set a floor on crude prices at about $50 per barrel.
The Saudis also have much of their money invested in the U.S.
Sometimes investors plan on “taking a loss” on certain investments as part of their long-range strategy.
They are depending on those assets for the future of their country after the oil runs out.
In the West? All their eggs aren’t just in this basket. Don’t think they don’t have a s**t load of investments worldwide, China and India being large ones, as well.
“it would take us no more than ten years”
We would have been in fine shape if that was the attitude carter would have taken the first time this happened. Now, obama(who would be king) is starting the mantra of “it will take us at least ten years” and giving that as the excuse that we should not be drilling now and drilling here.
Rather than tax the American taxpayer to spur development, why not offer tax cuts to companies to develop and produce it?
Nah, it would be far cheaper to invade Mexico and start tapping their oil reserves. Or even just start allowing drilling off our coast and in ANWR.
Good point—that is what the Democrats are trying to eliminate. They don’t want additional production, but they want to blame oil companies because they won’t just give it away in the spirit of kindness.
Wall Street Journal top headline - “Oil Summit to Take on Speculators”
First Der Spiegel is an excellent source of information which I didn't know about. So thanks for exposing me to it.
Second. The article links to another on peak oil - a very good one. In particular it's worth comparing the two on what they say about Saudi Arabia.
They have to believe that, if we wanted to, we could develop an alternative form of energy.
I am so sick of this BS “solution” to the high price of fuel I could just puke.
(1) people live far away from work because the housing costs are usually less than 1/2 that of being close to work. So any F’ing moron who thinks that moving from a $150,000 house to a $400,000 house to save $20/day is a fool. (2) who works at the same job for the rest of their lives these days? Should we move every time we get a new job? Maybe you can move every time ... if you keep the RV and live in the company's parking lot!
Ibrahim al-Muhanna is an avid reader, and his desk is piled high with books. At the top of the stack is Fareed Zakaria's bestseller "The Post-American World." "It's a great book," says Saudi Arabia's oil strategist. "It's all about leadership in times of crisis."
Looks like the Saudis and US congress are seeking out the same leadership?
True, but I suspect that the Iranians scare the Bejeebers outta the Saudis and they fear the consequences of an Obama victory.
The Saudis like having the U.S. play Middle Eastern cop. They mostly get the results they want with few risks. If the U.S. packs up and goes home, those sorry bastards are going to have to sort things out for themselves. The results would make the Iran-Iraq war (one million or so dead) look like a family spat.
Neither the EU nor China presently has the ability to project power sufficient to seize the fields.
Certainly not if the US opposed them.
You are right on target. The last thing they want is to see the U.S. go on an energy independent “war” footing.
$70 a barrel wouldn’t start a world wide depression (at least not by itself). In fact, until we hit about $120 there was very little resistance around the world.
As a capitalist nation why would we want him to lower prices?
Heck then again why do we have any subsidies or even the FED?
If he can get 500 a gallon should’nt the we be in support of this? </sarc>
First of all- McCain is owned by Soros too. Second of all, the GOP is as full of oil men as the Dems are with envirowhackos. And in the end, a huge chunk fo our economy is built on oil money.
Lastly, did I mention that most people just loooooooove the status quo?
I think that's the key.
Except "allow it" should read "force it".
As soon as a presidential candidate, a few governors, and 70-odd percent of the citizenry began to talk seriously about opening our own resources up - arab producers decided that more supply might be a good thing.
A good thing for them.
Somehow, someway, oil price will come down to something we will tolerate and producing states have every reason to believe we would - again - drop our energy efforts as soon as that happened.
What's needed is to open our fields, build refineries, and develop every other viable alternate energy source possible: it would cost tax money and entrepreneurial effort as well, but independence and security are better goals than most others I can think of.
I don’t like being inconvenienced anymore than the next guy, but frankly I hope the middle east oil suppliers price themselves right out of technological existance.
Infortunately, human nature despises change, but these high and rising prices are forcing Americans to do what they do best, INNOVATE.
Therefore, even though high oil prices painfully pinch us right now, in the long run it’s good for us. We will innovate our way out of oil dependancy and can no longer be held captive to middle east manipulations!
They have oil, we have food. Let’s see which war sabre rattles loudest.
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