Saudi Arabia - What to do?

This seems like one of the most one-sided relationships the US has.

Exactly what advantage do we have with them as an ally? It's certainly not oil, is it?

But other than stop selling arms to them, is there anything we can do about it?

Whatever we did, it probably wouldn't change their behavior much, but at least the US wouldn't come across as so weak.


A tribal territory turned into a country by the Brits using their then puppets, the Saud tribe. 

How could we sell it? 

Our economies are unstable, possibly near an unpleasant brink. Saudi's action is economic warfare using a resource of the world, oil. We invade this British created country and put that precious resource under the control of a multi country agency. An agency that has the power to allocate the oil equitably at a stable price. A world reserve replacing a brutal autocratic dictatorship. 

What could be more environmental than that?

But I know that won't happen. 

We have troops and equipment there protecting the Saudis from aggressors. Remove the troops, equipment and refuse to sell them additional weapons. But, stopping the sale of weapons may not be possible considering the political pull of defense contractors and arms dealers have with congress.


The solution is the same as it has been since the 1970's.  Reduce the need for fossil fuels.  The difference between the 1970's and today, is that now we have some good options for doing this as well as the imperative of global warming.  Now, if that is not an idea we can all get behind, then I suppose we are screwed.


The U.S. has cut its imports of Saudi oil by 90% over the last decade, thanks in part to increased domestic production. The U.S. is only importing 365,000 barrels a day of Saudi oil - that's not a lot. This is not to say that the U.S. must reduce its reliance on fossil fuels, but until the time when alternative energy has replaced the need for fossil fuels the U.S. doesn't need Saudi oil.

Saudia Arabia needs the U.S. more than the U.S. needs Saudi Arabia - for defense parts and defense industry support of its defense systems. Reciprocate the cuts in oil production by halting the sale of missile and weapons systems. Easier said than done. 


cramer said:

The U.S. has cut its imports of Saudi oil by 90% over the last decade, thanks in part to increased domestic production. The U.S. is only importing 365,000 barrels a day of Saudi oil - that's not a lot. This is not to say that the U.S. must reduce its reliance on fossil fuels, but until the time when alternative energy has replaced the need for fossil fuels the U.S. doesn't need Saudi oil.

Saudia Arabia needs the U.S. more than the U.S. needs Saudi Arabia - for defense parts and defense industry support of its defense systems. Reciprocate the cuts in oil production by halting the sale of missile and weapons systems. Easier said than done. 

But oil is a commodity.  If we (and other western nations) reduce our dependency on oil, it weakens the Saudis regardless of how much we actually import from Saudi Arabia.


tjohn said:

The solution is the same as it has been since the 1970's.  Reduce the need for fossil fuels.  The difference between the 1970's and today, is that now we have some good options for doing this as well as the imperative of global warming.  Now, if that is not an idea we can all get behind, then I suppose we are screwed.

Yes, we need to reduce fossil consumption. But reducing does not help with our current problem. We can't reduce enough reliance now.

One way to reduce reliance is to encourage and allow people to work at home. Yet, politicians are doing the opposite. We have so called environmental friendly politicians like NYC's mayor and NY's governor pushing companies to get their workers to commute back. 

Look at the EV push. Its easy politics to say we will go all EV. Though the number of electric vehicles compared to gas are still few, we've seen a five fold increase in the price of Lithium. There may be enough Lithium to go all electric but we certainly don't have the mining capacity to extract what will be needed. If we can and do mine, will we then be dependent on countries that extract Lithium? Instead of oil will we see Lithium price wars?

What about the needed power plants and transmission lines? Waiting 15 years for them to get designed, approved and built won't be of any help to us now.


The idea of having American kids die to secure less expensive oil for Americans who won't even give up their SUVs to conserve fuel is disgusting.  What's more, Exxon doesn't have to raise their oil prices when opec does, but they jump right on board to increase profits .


Steve said:

cramer said:

The U.S. has cut its imports of Saudi oil by 90% over the last decade, thanks in part to increased domestic production. The U.S. is only importing 365,000 barrels a day of Saudi oil - that's not a lot. This is not to say that the U.S. must reduce its reliance on fossil fuels, but until the time when alternative energy has replaced the need for fossil fuels the U.S. doesn't need Saudi oil.

Saudia Arabia needs the U.S. more than the U.S. needs Saudi Arabia - for defense parts and defense industry support of its defense systems. Reciprocate the cuts in oil production by halting the sale of missile and weapons systems. Easier said than done. 

But oil is a commodity.  If we (and other western nations) reduce our dependency on oil, it weakens the Saudis regardless of how much we actually import from Saudi Arabia.

I'm agreeing with you. The point I was trying to make is that Saudi Arabia no longer has leverage - they need the U.S. more than the U.S. needs it. Now that the U.S. doesn't need Saudi oil, we no longer has to be fearful of not supplying Saudi with defense systems. The U.S will continue to have that leverage as the U.S. transitions to alternative energy. But we're not going to be independent of fossil fuels for many years. 

" The generation share of renewables will increase from 21% to 44% during 2022-2050, while fossil fuels will decrease from 60% to 44%. The US Energy Information Administration is constantly gathering and analyzing data about energy markets."

https://www.ny-engineers.com/blog/eia-annual-energy-outlook-2022-renewables-fossil-fuels-and-emissions


I think our big fear about Saudi Arabia is that it could become another Islamist state, but a very wealthy one.  


DanDietrich said:

I think our big fear about Saudi Arabia is that it could become another Islamist state, but a very wealthy one.  

Isn't that a reason that Saudi Arabia should be concerned about a halt of U.S. defense systems?  


DanDietrich said:

I think our big fear about Saudi Arabia is that it could become another Islamist state, but a very wealthy one.  

What do you mean by Islamist state? Aren't they one already?


They are run by a wealthy royal family, not a group of clerics.  That's what I mean.  They are definitely forming a closer relationship with Putin, however, so I am not inclined to keep selling them advanced weapons.


On Saudi Arabia, I recently finished reading Desert Queen by Janet Wallach.  Essentially a bio about Gertrude Bell, who worked alongside Lawrence to establish ties with the various tribes.  Albeit a bit one-sided, it's one of the better biographies I've read. Good background reading on the entire region at the first part of the 20th century. 

As to Saudi Arabia being an Islamist state, it very much is one.   Mecca and Medina are in it.  


dave said:

On Saudi Arabia, I recently finished reading Desert Queen by Janet Wallach.  Essentially a bio about Gertrude Bell, who worked alongside Lawrence to establish ties with the various tribes.  Albeit a bit one-sided, it's one of the better biographies I've read. Good background reading on the entire region at the first part of the 20th century. 

As to Saudi Arabia being an Islamist state, it very much is one.   Mecca and Medina are in it.  

I love reading travel writers. Hilary Mantel, who lived in Saudi Arabia for four years captured the secret Saudi lifestyle in her piece  “once upon a life” in the Guardian some years ago. You are never sure who is friend or foe in that country. 
The center of Islam. 


DanDietrich said:

They are run by a wealthy royal family, not a group of clerics.  That's what I mean.  They are definitely forming a closer relationship with Putin, however, so I am not inclined to keep selling them advanced weapons.

I know what you mean. They’re apparently not like Afghanistan which is run by the taliban. And no, we should not be selling them our best weapons  because they are close with Russia. Some people seem to think Russia is our friend. 


While we are working on alternatives to fossil fuel over the years, we can also continue to expand our domestic production in the interim. I believe it has decreased since ramping up several years ago in the fracking expansion, to the point where there was so much oil and gas in the world that the price completely tanked. We can use that as leverage against OPEC, protect our domestic market, and become completely independent of Saudi oil, while exporting our surplus. We can't have it both ways yet, complaining about price and supply while strangling our own domestic production capacity. 



"President Joe Biden will consider working with Congress to change the United States’ relationship with Saudi Arabia amid outrage over its support for an oil production cut that was seen as partial to Russia, a White House spokesman said.

Further evidence has emerged this afternoon that a significant diplomatic rift between Saudi Arabia and the United States is opening.

Semafor reports that Washington is backing out of a meeting with the Saudi-led Gulf Cooperation Council on air and missile defenses:

Meanwhile, Punchbowl News reports more senators are wondering why Washington should work with Riyadh.

“I think we should look carefully at everything we’re sending. Because their inability to cooperate with the West and their willingness to cooperate with Russia is very disturbing,” said Democrat Jack Reed, who chairs the Senate armed services committee.

“Why should we [send arms to Saudi Arabia]? If they don’t have any more concern for international security and the stability of the world economy, why should we be helping them?” Angus King, an independent senator who caucuses with Democrats, said. He sits on both the armed services and intelligence committees."

    https://www.theguardian.com/us-news/live/2022/oct/11/biden-saudi-arabia-opec-oil-prices-midterms-us-senate-spending-latest


    "The comments came a day after Senator Bob Menendez, Democrat of New Jersey and the chairman of the Foreign Relations Committee, assailed Saudi Arabia for effectively backing Russia in its brutal invasion of Ukraine. The senator called for an immediate freeze on “all aspects of our cooperation with Saudi Arabia,” vowing to use his power to block future arms sales.

    “There simply is no room to play both sides of this conflict — either you support the rest of the free world in trying to stop a war criminal from violently wiping off an entire country off of the map, or you support him,” Mr. Menendez said. “The Kingdom of Saudi Arabia chose the latter in a terrible decision driven by economic self-interest.”

    Senator Richard J. Durbin of Illinois, the second-ranking Democrat in the Senate, said on Tuesday morning that Saudi Arabia clearly wanted Russia to win the war in Ukraine. “Let’s be very candid about this,” he said on CNN. “It’s Putin and Saudi Arabia against the United States.”

    https://www.nytimes.com/2022/10/11/us/politics/biden-saudi-arabia-oil-production-cut.html


    Jasmo said:

    While we are working on alternatives to fossil fuel over the years, we can also continue to expand our domestic production in the interim. I believe it has decreased since ramping up several years ago in the fracking expansion, to the point where there was so much oil and gas in the world that the price completely tanked. We can use that as leverage against OPEC, protect our domestic market, and become completely independent of Saudi oil, while exporting our surplus. We can't have it both ways yet, complaining about price and supply while strangling our own domestic production capacity. 

    we are not strangling our supply.  Exxon is.  They are refusing to invest in new wells and enjoying record profits.  


    DanDietrich said:

    Jasmo said:

    While we are working on alternatives to fossil fuel over the years, we can also continue to expand our domestic production in the interim. I believe it has decreased since ramping up several years ago in the fracking expansion, to the point where there was so much oil and gas in the world that the price completely tanked. We can use that as leverage against OPEC, protect our domestic market, and become completely independent of Saudi oil, while exporting our surplus. We can't have it both ways yet, complaining about price and supply while strangling our own domestic production capacity. 

    we are not strangling our supply.  Exxon is.  They are refusing to invest in new wells and enjoying record profits.  

    There are other constraints on our current capacity. Production has dropped significantly since pre-pandemic levels.

    So we have the wells and infrastructure to increase production ready to go. Why we can't is a question.

    https://www.npr.org/2022/03/31/1090067942/why-producing-more-domestic-oil-is-so-difficult-right-now

    https://www.ceicdata.com/en/indicator/united-states/crude-oil-production


    DanDietrich said:

    Jasmo said:

    While we are working on alternatives to fossil fuel over the years, we can also continue to expand our domestic production in the interim. I believe it has decreased since ramping up several years ago in the fracking expansion, to the point where there was so much oil and gas in the world that the price completely tanked. We can use that as leverage against OPEC, protect our domestic market, and become completely independent of Saudi oil, while exporting our surplus. We can't have it both ways yet, complaining about price and supply while strangling our own domestic production capacity. 

    we are not strangling our supply.  Exxon is.  They are refusing to invest in new wells and enjoying record profits.  

    The biggest reason that oil and gas companies aren't drilling new wells is that they aren't sure that oil prices will stay high long enough for them to have made the investment.  Plus, why should they drill when Biden, Sanders and so on say they want to put them out of business? 


    Biden embarrassed himself and the U.S. when he fist-bumped MBS, but bad-mouths the U.S. oil and gas companies, saying he wants to put them out of business and then criticizes them for not drilling new wells. He won't even sit down with them personally. 


    cramer said:

    DanDietrich said:

    Jasmo said:

    While we are working on alternatives to fossil fuel over the years, we can also continue to expand our domestic production in the interim. I believe it has decreased since ramping up several years ago in the fracking expansion, to the point where there was so much oil and gas in the world that the price completely tanked. We can use that as leverage against OPEC, protect our domestic market, and become completely independent of Saudi oil, while exporting our surplus. We can't have it both ways yet, complaining about price and supply while strangling our own domestic production capacity. 

    we are not strangling our supply.  Exxon is.  They are refusing to invest in new wells and enjoying record profits.  

    The biggest reason that oil and gas companies aren't drilling new wells is that they aren't sure that oil prices will stay high long enough for them to have made the investment.  Plus, why should they drill when Biden, Sanders and so on say they want to put them out of business? 

    Also, during the pandemic, when demand for oil dropped significantly and prices crashed, oil and gas companies had to shut-in a lot of wells and laid-off over 100,000 oilfield workers. When demand picked back up, the oil and gas business had to deal with the kind of shortages that other industries had to deal with. A lot of the workers who lost their jobs aren't coming back. There are shortages of steel, sand and other material required to drill wells. 


    Sorry,I'm not going to give companies earning  record profits and getting huge tax breaks a pass because a President hurt their feelings.  Long term we do want to get away from oil, but new exploration and wells would only cost a tiny percentage of their current profits.  They are creating much of this inflation out of their own greed.


    DanDietrich said:

    Sorry,I'm not going to give companies earning  record profits and getting huge tax breaks a pass because a President hurt their feelings.  Long term we do want to get away from oil, but new exploration and wells would only cost a tiny percentage of their current profits.  They are creating much of this inflation out of their own greed.

    In 2014 oil companies drilled like crazy. Then prices crashed because too many wells had been drilled.   Many of the shale producers went out of business. That's what oil companies are trying to avoid. Why should they drill if they're afraid of a repeat of 2014?

    btw - In 2014 Saudi Arabia tried to put the oil companies out of business by increasing production and cutting prices. 

    Oil prices peaked at $107.95 on June 20, 2014. Oil prices crashed to $44.08 on Jan. 28, 2015. The cost of producing was around $50/bbl. 

    You don't even have to go back to 2014. In March 2020, because of the collapse of the oil market, prices actually went to - $37  - that's a minus $37. Traders were actually paying to have their oil taken off their hands. 

    US oil prices turn negative as demand dries up

    https://www.bbc.com/news/business-52350082


      Yes, but the shale oil rush was more or less a wildcat adventure.  Big oil lowered their prices to drive them out of business because they were not part of the consortium.  Now they are back to enjoying big profits without any thoughts of helping the economy or the country .


      DanDietrich said:

      Yes, but the shale oil rush was more or less a wildcat adventure.  Big oil lowered their prices to drive them out of business because they were not part of the consortium.  Now they are back to enjoying big profits without any thoughts of helping the economy or the country .

      It wasn't big oil that tried to drive other companies out of business - it was Saudi Arabia and other OPEC countries. Oil is a global commodity - WTI and Brent Crude are global benchamarks. They each have a relationship to the other. OPEC was in a price war with the US producers. 

      Oil prices keep plummeting as OPEC starts a price war with the US

      "Essentially, OPEC is now engaged in a price war with oil producers in the United States. The cartel will let prices keep falling in the hopes that many of the newest drilling projects in the US will prove unprofitable and shut down."

      https://www.vox.com/2014/11/28/7302827/oil-prices-opec


      I know it's a commodity, but American producers happily walk in lockstep with opec+.  What if they decided to sell oil in the US for 10$ less per barrel?  It would piss off Opec but it might help us.  Or at least sell the government enough oil to refill our strategic reserves at a discount.



      Deleted. 


      My son put me on to the Yale University free course lectures on youtube.   I have been watching professor Snyder's lectures in a class about the making of modern Ukraine.  The lectures are very up-to-date and made as of last week.   Putin said at one point that he wants to rescue Ukraine from the empire of western Europe.   He wants them to return to the Russian empire. Putin is still thinking of Russia as an empire.   I hope Ukraine continues to kick Russia's butt and drives them out.       

        Added thought:  I assume that this group knows that the "Charge of Light Brigade"  happened in Crimea when the Brits, French, and Turks were fighting Russia.   Florence Nightengale, the mother of modern nursing, started her work there to help wounded soldiers and reduce cholera.  


      In order to add a comment – you must Join this community – Click here to do so.

      Advertise here!

      Sponsored Business

      Find Business

      Rentals