Tuesday, November 13, 2007

No OPEC Production Increase

The single best indicator harmony in the Saudi-US relationship is Saudi Arabia's oil production policy. That is also the single best indicator of disharmony between Saudi Arabia and Iran.

As a subordinate state to the US, Saudi Arabia delivers two products. The most important is a muted opposition to Israel and the use of Saudi resources to advance Israel's regional aims and restrict Israel's opponents. Saudi funds used to arm Abbas for confrontation with Hamas is one example, funds used to support anti-Hezbollah parties in Lebanon is another. Saudi opposition to Nasser was a previous one, as was the Saudi funding of the mutually destructive Iran/Iraq war, as was the permission obtained by the US to use Saudi Arabia as a base to bomb and invade Iraq during and after the gulf war.

The second product given by the Saudis to the United States is low oil prices. The most effective thing Saudi Arabia, or anyone could do to limit Iran today would be to lower oil prices. Saudi Arabia can do that not only by increasing production, but also by striking a tone in its public statements that it believes the price should be lower.

In that context we see a quote from ft.com:

In an interview with the Financial Times, Ali Naimi, the Saudi oil minister, said “there will be absolutely no discussion” by heads of states or their oil ministers on short-term supply and demand at the organisation’s summit, which will concentrate on with longer-term strategies of producers.

If someone was to ask what does Saudi Arabia get from its relationship with the United States, the answer is not much. But the Saudis are buffoons. An illustration of the power of a monarchal political system to make a laughing stock out of any nation or religious belief system.

Even as that is the case though, it is also clear that since the invasion of Iraq, Saudi Arabia is steadily becoming a less reliable ally of the United States.

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