I have actually been puzzled by the Saudi refusal to increase production of oil in the face of rising prices. Sure, they like higher prices. But they also know that higher prices that endure will lead even our Left to build nuclear power plants, drill through polar bears to get to Arctic oil, drill off of Ted Kennedy's coastal property, and strip mine for oil shale out west.
But again, Saudi Arabia says no:
Saudi Arabian leaders made clear Friday they see no reason to increase oil production until their customers demand it, apparently rebuffing President Bush amid soaring U.S. gasoline prices.
And this refusal is prompting considerable anger as this move indicates:
Senate Democrats introduced a resolution that would block $1.4 billion in arms sales to Saudi Arabia unless Riyadh agrees to increase its oil production by 1 million barrels per day.
The Saudis know that in the long run, they need to keep their customers reliant on their oil and so prompting a search for alternative energy sources is not in their interest.
The Saudis also know they need us to protect Saudi Arabia from the Iranians who are also benefitting from the high oil prices, which helps them be a bigger threat. Angering us is no recipe for a strong alliance. Especially with that whole support for aggressive Wahabbi Islam.
Further, the Saudis know that their low cost of production means they can make money when the Iranians cannot even at substantially lower prices.
Finally, in the mid-1980s, the Saudis did increase their production in an effort to drive down oil prices to harm the Iranians and help the Iraqis during the Iran-Iraq War. Iraq could borrow money to wage war. Iran needed to sell oil to wage war.
So this is where I make a big leap.
What if we are planning to do something about Iran this year. An aerial attack on Iran's nuclear facilities and security forces. A blockade, with a seizure of Iranian-held islands in the Gulf. Interception of Iranian gasoline imports. A revolt. Something else. It doesn't matter what, just that there will be a "what."
That "what" will mean Iran's oil exports will be shut down either from our actions or Iran's reaction to our effort, whatever it is.
With that possibility there, it would be nice to be able to make up for Iran's halt in oil exports by having Saudi Arabia's excess capacity available to dampen any panic over oil supplies. If Saudi Arabia ramps up production now, while Iran is exporting oil, we will have no psychological support of announcing a big increase during a crisis. Better $128 per barrel oil now than $500 per barrel later. People are so jittery about oil supplies that even though the end result in oil production would be the same whether Saudi Arabia increases production now or later, doing it later in the crisis would be far more reassuring to the world.
And is this related?
Congress voted to temporarily halt daily shipments of 70,000 barrels of oil to the nation's emergency reserve. Bush has refused to stop pouring oil into the Strategic Petroleum Reserve, saying the stockpile was meant for emergencies and that halting the shipments would have little or no impact on gasoline or crude oil prices.
It's a move that Democrats have sought for the past year to increase supply and apply downward pressure on prices. With an eye to the November election, the Senate sent the measure to the president Wednesday night without a single GOP objection. The White House has indicated that Bush will sign the reserve measure.
I've wondered, but never found out the answer, can we start withdrawing from the SPR quickly? Do we need to stop putting oil in before we can pull oil out? Do we need time to switch over from adding oil to withdrawing oil? The SPR is nearly full anyway. So having an excuse to stop adding oil to the SPR might hide our efforts to prepare to pull oil out, if we cannot do that quickly with oil being added. I do know we need thirteen days from the order being given to get the oil moving. But does this include stopping the flow in?
Adding a maximum withdrawal from the SPR even as Saudi Arabia opens their spigots would sure be helpful in a crisis. And how much oil is out there in Europe, Asia, and private floating reserves?
And finally, I have to believe that all three presidential candidates would much rather have President Bush take the heat for this job than wait until 2009 to take command of the Iran problem. If it works, he's lame duck anyway. If it doesn't, one more thing to blame on President Bush, eh? And I believe that President Bush is willng to take the heat to defend us.
While I don't have a conspiratorial mindset, I do have a suspicious mind. And this explanation would sure explain a lot of questions I've had hanging.
