Kentucky Fellows 2008Saudi Arabia RelationsZavell and Steckler Page 3
1nc: Uniqueness + Link
A. Uniqueness: The US is the dominant purchaser of Saudi oil, but China is close behind and could pass if US demand falters.Richter June 8
(Paul; Los Angeles Times Staff Writer; “New forces fraying U.S.-Saudi oil ties”; http://www.latimes.com/news/nationworld/world/la-fg-ussaudi8-2008jun08,0,169219.story)
WASHINGTON — For decades, Saudi Arabia worked with its dominant customer, the United States, to keepworld oil markets stable and advance common political goals.
But the surging price of oil, which soared more than $10 a barrel Friday to arecord-high $138.54, has made it plain that those days are over.
an oil-thirsty Asia, have blunted the
United States' leverage and helped sour the two countries' relationship. As gasoline prices have risen, the WhiteHouse has unsuccessfully exhorted the Saudis to step up production, and Congress has threatened retaliation. But
the situation now is a far cry from the days when the U.S. economy dominated the direction of the petroleum
market. "That gave us leverage," said Greg Priddy, an oil analyst at the Eurasia Group, a New York-based risk assessment firm. "There's certainly a perception that the power equation has changed."
economic relationship comes when the vital U.S.-Saudi security relationship also has been fraying.
In the 1980s, the U.S.-Saudi bond that kept oil prices low was credited with helping weaken the Soviet Union during the waning days of the Cold War. And it helped keep markets stable after Iraq's 1990 invasion of Kuwait. But the Saudi government has been dismayed by the consequences of the war in Iraq and by what it sees as a weak Bush administration commitment to the Palestinians.
The relationship is shaping up as a politicalissue for the fall campaign, certainly among congressional candidates and perhaps among presidential candidates.
With a 20-million-barrel-per-day habit, the U.S. remains the world's largest oil customer, even though its daily consumption over the years has dropped from one-third of total daily production to one-fourth. But
the U.S.can no longer guarantee on its own that producers will have the markets they need for their oil. Nor can theSaudis, alone, ramp up production in sufficient amounts to stabilize prices.
China and other Asian nations now use about 17 million barrels a day. That'sup more than 20% since 2003, and booming growth is expected to continue.
With the shift in buying power, the Saudis are cultivating important
analysts say. Saudi Arabia recently contributed $50 million for Chinese earthquake relief, and King Abdullah has visited China.
"The relationship is clearly
said Paul J. Saunders, who served in the State Department under President Bush and is executive director of the Nixon Center think tank. Saunders believes that
China may be buying more Saudi oil than the United States in less than a decade.
That sets up "a real possibility that China
will have more leverage in dealing with Saudi Arabia than we do ," he said. The Saudis helped the United Statesfor years as "doves" within the Organization of the Petroleum Exporting Countries on the issue of oil prices. Theywere willing to moderately increase production, fearing that high prices could cause the United States and othersto seek alternate supplies or cut consumption, as happened in the 1980s in reaction to the oil price shocks of the1970s. But attitudes have been shifting. Many believe the
Saudis have grown more interested in conservingtheir supplies for later generations, and
confident that if U.S. consumption drops,the economies of
will take up the slack. Page 3