The U.S. Isn't Wedded to Saudi Oil
by Stanley A. Weiss

Next week's emergency summit between President Bush and Saudi Crown Prince Abdullah aims to heal recently inflicted wounds to the long-standing U.S.-Saudi partnership. But like all marriages of convenience, the loveless union between the United States and Saudi Arabia always has been based more on common interests (oil) than common values (freedom).

And Sept. 11 exposed the depths of this dysfunctional relationship. Saudi Arabia, Americans were shocked to learn, was cheating all along and, worse, funding its infidelities with U.S. dollars. As gas-guzzling Americans pumped more money than any other nation into the oil kingdom, the royal family was pumping millions into radical religious schools at home and abroad, globalizing their strict 18th century Wahhabi brand of Islam. From these hotbeds of hate graduated Osama bin Laden and 15 of the 19 Sept. 11 hijackers.

Paradoxically, the U.S. forces deployed 12 years ago to protect and stabilize Islam's Holy Land have achieved just the opposite, undermining public support for the very regime they were sent to protect and inspiring Bin Laden's jihad against America. As Abdullah wrote to Bush last summer, "a time comes when peoples and nations part ... it is time for the United States and Saudi Arabia to look at their separate interests."

Now the Saudis say the U.S. needs them. But truth be told, the United States today is less, not more, dependent on Saudi oil. The country that provides the U.S. with more oil than any other (40% of the crude we use) is--the U.S. The United States also imports twice as much oil from its Western Hemisphere neighbors, including Canada and Venezuela, as it does from the Persian Gulf. The U.S. needs oil, but not from Saudi Arabia.

In February, Russia edged out Saudi Arabia to become the world's biggest producer of crude for the first time since the 1980s. The largest oil field in 30 years was discovered off the coast of Kazakhstan, a former Soviet republic. Some analysts are calling that a "second Kuwait." The Caspian Basin is believed to hold the world's third-largest reserves (perhaps up to 200 billion barrels), behind only the Persian Gulf and Siberia. South America and western Africa together are believed to hold an additional 100 billion barrels.

To be sure, with one-quarter of the world's oil reserves and an excess capacity of 3 million barrels a day, only Saudi Arabia can moderate the markets with a turn of the spigot, as it did following Iraq's recent decision to suspend exports for up to 30 days. Nevertheless, the Saudis need the U.S. as much as the other way around.

In Saudi Arabia, oil is the only game, accounting for more than 90% of exports and 80% of government revenue. As oil prices have plunged in recent years, the national debt has soared. Per capita gross domestic product has plummeted from $28,000 in 1981 to less than $7,000 today. With dwindling receipts, the House of Saud simply cannot afford the generous welfare state with which it bought the loyalty of its people.

This is why the oiligarchies of the Gulf are not responding to Iraqi leader Saddam Hussein's call to withhold oil as a weapon against the United States and Israel. If they don't sell it, others will. These petro-princes remember that their boldest attempt at using oil as a weapon, the embargo of the 1970s, failed in its main mission of forcing Israel from the Palestinian territories. Even today, half or more of Iraqi oil ends up in the U.S.

Nor is the Organization of Petroleum Exporting Countries the superpower it was two decades ago. Witness the cartel's pathetic attempt at cajoling Russia, not an OPEC member, into significant production cuts to prop up prices.

Americans worried about rising oil prices need not fear a Saudi Arabia scorned. It's time for the U.S. to walk out on Saudi oil.

The writer is founder and chairman of Business Executives for National Security. The views he expresses are his own.