Bending the Third Rail
Because We Should, We Can, We Do
Thursday, January 11, 2007
More On Oil
This is the second reference I've now read to Saudia Arabia using excess oil production as a weapon:
Saudi Arabia's growing fear of Iranian hegemony in the Middle East may be driving the world's largest crude oil exporter to prepare a more aggressive long-term political oil strategy that could subvert an Iranian ascendancy, insiders and analysts say.

Under a new, accelerated production program, the kingdom could increase its spare oil drilling capacity to at least 3 million barrels a day by 2011, up from around 2 million now. Intelligence experts estimate Iran might have the capability to develop nuclear weapons by then. Additional spare capacity could give the Saudis greater leverage as a political tool.
Maybe this is why everyone is jumping out of the oil futures market, causing prices to drop, anticipating a failure by the U.S. in Iraq and the Saudi's using their preferred weapon, flooding the oil market. The Saudi's are already now committed to limiting production to prop up prices, but to flood the market to destroy Iran's economy is certainly an interesting twist. Apparently the Iranians have already said that any attempt to use oil as a weapon would be seen as an act of war. Thus, along with building up production capacity, the Saudi's have also significantly increased defense spending to $50 to $60 Billion per year.

And all the while, American blitely continue to consume oil in prodigious amounts .......
Written at 2:12 PM by Greyhair.
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