Saudis Unfazed by U.S. Talk of Energy Independence
_____________________________
Tue Aug 3, 2004 07:19 AM ET
By Heba Kandil
DUBAI (Reuters) - Saudis are not alarmed about Democratic presidential nominee John Kerry's pledge to end U.S. dependence on Saudi oil and believe Washington will remain reliant on the kingdom, industry experts said Tuesday.
They dismissed Kerry's call for America to rely on "its own ingenuity and innovation, not the Saudi royal family" as rhetoric to win votes, arguing that Saudi oil would still be critical to any U.S. administration.
Regardless of where Washington imports its oil from, crude from the kingdom, a regional U.S. ally and the world's largest oil exporter, feeds a global market, affecting oil prices.
"It's one global market and it's oil prices that count, not who is selling. Saudi Arabia is a cornerstone of that market and there is no such thing as wanting to be independent of Saudi oil," said Sadad Husseini, a retired Saudi Aramco executive.
OPEC heavyweight Saudi Arabia owns one-fourth of the world's proven crude reserves and is the largest foreign oil supplier to the United States -- providing 17 percent of U.S. crude imports.
Ties between Washington and Riyadh were strained by the Sept. 11 attacks on U.S. cities, which were carried out by Saudi-born Osama bin Laden's al Qaeda network and in which 15 of the 19 perpetrators were originally Saudi.
The post-Sept. 11 chill in Saudi-U.S. ties has raised concerns that Riyadh may no longer be willing to act as a guarantor of cheap oil as it did during the 1990s.
Anti-Saudi sentiment in the United States deepened after al Qaeda militants, waging a 14-month campaign of attacks in Saudi Arabia, beheaded a U.S. citizen in the kingdom.
Kerry touted a plan for U.S. energy independence when he formally accepted the Democratic presidential nomination last Thursday. His party's platform calls for the United States to develop crude supplies from non-OPEC countries like Russia, Canada and nations in Africa.
"Our energy plan for a stronger America will invest in new technologies and alternative fuels and the cars of the future -- so that no young American in uniform will ever be held hostage to our dependence on oil from the Middle East," he said.
But London-based analyst Adam Sieminski dismissed Kerry's remarks as wishful thinking.
Any Democratic or Republican or independent candidate who thinks they can make the U.S. energy independent will fail," he said. "A presidential candidate can make all kinds of statements, and if they ever take office they try to figure out how to correct the record."
Saudi officials criticized Kerry for "bashing" the kingdom and said it has been a reliable supplier of oil to the U.S. market and would continue to do so whether or not Kerry wins.
MIDDLE EAST VITAL TO ALTERNATIVE FUELS
With oil demand and prices at their highest levels in decades -- U.S. oil prices set a record Tuesday reaching $44.24 a barrel -- analysts said consumers were not showing any signs of completely forsaking oil for other sources of fuel.
They said oil was more competitively priced than other fuels, more environmentally friendly and a vital component in petrochemicals and lubricants.
Even developed alternative energy sources like natural gas come from the Middle East region, including Saudi Arabia.
"This region, led by Gulf Arab states, is at the forefront of endorsing alternative energy sources," said one Arab oil source, adding that Arab oil-producing states had no fear that alternative fuels will squeeze them out of the energy market.
Saudi Arabia, which has the world's fourth biggest estimated gas reserves of 235 trillion cubic feet, signed gas exploration contracts this year with foreign oil giants.
Neighbor Qatar owns the world's largest single gas deposit found and aims to become the biggest producer of liquid natural gas and gas-to-liquid fuels by the end of the decade.
© Reuters 2004. All Rights Reserved. |
