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Politics : Foreign Affairs Discussion Group

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To: skinowski who wrote (23639)	4/6/2002 10:27:21 AM
From: carranza2	Read Replies (3) of 281500

I commend to you the latest issue of Foreign Affairs which contains an incisive article concerning the implications for froreign relations of the upcoming growth of the Russian oil industry. One of the main points made by the article is that Saudi Arabia has been able to control the oil market through its ability to use its excess capacity to impose market discipline on other OPEC members. This excess capacity can also be used to achieve political goals, as was the case in 1973. The Saudis have for the most part acted benevolently towards the West, holding the power the excess capacity gives them in check. The Russian oil industry, and its enormous projected growth, will make the power enjoyed by the Saudis as a result of their excess capacity a thing of the past. The question is whether the Russians will use their future oil power in a benevolent manner, like the Saudis did, or whether they will use it in some unforeseen manner. My bet is that they will use it to modernize their economy. Once the Russian oil industry builds up its production, we will see the influence of Middle Eastern producers like the Saudis wane.

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