And, again, it really doesn't matter who gets their oil from where. If you take Saudi production away, it will impact America just as a loss in Venezuelan oil production would impact Japan and Europe. Hell, a refinery fire or a pipeline disruption downstream will raise the price of gasoline 30 cents or more in some markets. The decision to pump a few million fewer barrels is felt immediately. Where you get your crude oil from is more a function of transportation efficiencies in deregulated Western markets. If you lose one source of production, particularly one on the scale of Saudi Arabia, it will be hard to replace in any acceptable time frame.
Yes Rip, there are multinational oil companies headquartered in various countries. I cover international oil companies as part of my job. In fact, next week Ill be talking to BP, Shell and ExxonMobil about their joint ventures with PetroChina.
Everybody is in every deregulated market trying to do everything, and all multinationals have a major presence in the US market and, of course, there's ExxonMobil. All have significant political power in the US and abroad.
While it is possible that the oil issue is profit taking, the current administrative concern is likely over the threat of a Saudi supply disruption, which as Ping's material points out, is possible. Proactive gains would just be an ancillary benefit. Of Iraq and Saudi Arabia, which is the true home of international, fundamentalist Islamic terrorism? What happens if we lose Saudi Arabia five years from now in another Iran, or if they start playing political pressure games with their supply to influence world politics because the ruling family is running scared? It sure would be nice to have a comparable source to replace that shortfall.
Charon
