US Sen. John McCain will probably smile with satisfaction after learning of remarks by members of Saudi Arabia’s legislative body, the Majlis Shura, who feel that the US should begin producing more oil at home.
“There are a great deal of restrictions in many areas of the world—not the least of which is the United States—that could be producing oil,” said Bandar bin Mohammed Al Eiban, part of a 5-man Shura delegation to the US.
The delegation’s visit came ahead of a special producer-consumer meeting hosted by Saudi Arabia aimed at reducing crude prices. In particular, Saudi Arabia wants the US to reduce market speculation, focus on increased access for exploration, and build new refineries to process crude.
McCain’s view
The Saudi view seemed to chime with McCain, who said the “next president must be willing to break with the energy policies not just of the current administration, but the administrations that preceded it, and lead a great national campaign to achieve energy security for America.” In particular, McCain wants to reverse the current federal ban on offshore drilling.
“As for offshore drilling,” said McCain, “it’s safe enough these days that not even hurricanes Katrina and Rita could cause significant spillage from the battered rigs off the coasts of New Orleans and Houston. Yet for reasons that become less convincing with every rise in the price of foreign oil, the federal government discourages offshore production.”
Of no less interest to the Saudis, perhaps, were McCain’s words about the effect of speculation on oil prices.
Focus on speculators
“There is the further problem of speculation on the oil futures market, which in many cases has nothing to do with the actual sale, purchase, or delivery of oil,” McCain said. “When you have enough speculators betting on the rising price of oil, that itself can cause oil prices to keep on rising. And while a few reckless speculators are counting their paper profits, most Americans are coming up on the short end—using more and more of their hard-earned paychecks to buy gas for the truck, tractor, or family car.”
Still, the Saudis might well have been a bit concerned by his references to high oil prices “that may come as good news in Moscow, Riyadh, or Caracas,” as well as his statement that “much of the world’s oil supply is controlled by states, regimes, and a cartel for which America’s well being is not exactly a priority.”
That might seem somewhat undiplomatic to the Saudis, who as producers are looking for a truly cooperative attitude from consumers over pricing.
“We may be at an important junction as far as oil is concerned. The increase has been so dramatic that it is really impacting the ability of nations to pay for their oil, and I expect some very serious cooperation between producers and consumers,” Al Eiban said.
