USA: Saudi Arabia says it is not to blame for soaring oil prices in US while democrats blame President Bush for the energy crisis

Record ID: 345113

  • Title: USA: Saudi Arabia says it is not to blame for soaring oil prices in US while democrats blame President Bush for the energy crisis
  • Date: 3rd May 2006
  • Summary: (AM) WASHINGTON D.C. UNITED STATES (MAY 2, 2006) (REUTERS) WIDE SHOT WITH SAUDI OIL MINISTER AT PODIUM; CUTAWAY PEOPLE LISTENING (SOUNDBITE) (English) SAUDI MINISTER OF PETROLEUM AND MINERAL RESOURCES ALI Al NAIMI SAYING: "It follows then that there is no truth, whatsoever, to the popular belief that the dependence on foreign crude oil leads to higher prices for gasoline at the pump. The prices of both domestic and foreign crudes are set globally through the interaction of supply and demand. Any differences in the prices between domestic and foreign crudes are due to variations in quality, taxes, and location."
  • Embargoed: 18th May 2006 13:00
  • Keywords:
  • Location: Usa
  • Country: USA
  • Topics: International Relations,Energy
  • Reuters ID: LVADOGNDEPPJ5CC5197D7Y8IMVSV
  • Story Text: The price of oil rose toward $75 a barrel on Tuesday (May 2, 2006), flirting with the record high of $75.35 for U.S. crude touched in April. But Saudi Arabia, the world's biggest oil exporter, said current soaring prices was not the result of inadequate supplies.
    Speaking at the Center for Strategic and International Relations in Washington D.C., Saudi Oil Minister Ali al-Naimi said that currently high crude oil prices are of no long-term benefit to either producers or consumers and contribute to market instability. He also said Saudi Arabia is committed to working with the United States to keep oil markets stable, including plans to increase production to 12.5 million barrels a day by 2009. Al Naimi said that the relative level a country depends on foreign oil has no meaningful effect on the prices consumers pay for gasoline at the pumps.
    "It follows then that there is no truth, whatsoever, to the popular belief that the dependence on foreign crude oil leads to higher prices for gasoline at the pump," Al Naimi said. "The prices of both domestic and foreign crudes are set globally through the interaction of supply and demand. Any differences in the prices between domestic and foreign crudes are due to variations in quality, taxes, and location," he added.
    Raymond Carbone, President of the Energy trading firm, Paramount Options, says that Saudi Arabia's influence decreases as prices soar.
    "The Saudi influence in my mind diminishes the higher we go unless they were to pull oil off of the market," Carbone said in New York. "But they've been adding oil to the market as we've been going up and it really has not dampened the rally in the least. So their influence increases on the upside, decreases on the down side in my mind, as we continue to go higher in price," he added.
    U.S. Democrats have blamed high gasoline prices, in part, on Saudi Arabia and the Bush administration.
    House Minority Leader Nancy Pelosi said one of the reasons gas prices were so high is because President Bush and Vice President Dick Cheney have worked in the oil industry.
    At a news conference, Pelosi said that energy independence within the next 10 years is the Democratic goal for the United States. "For the oil minister of Saudi Arabia to say that that this is a myth is wishful thinking on his part," Pelosi said. "This has to happen in our country. Perhaps if the president of the United States could have a conversation with his Saudi friends as he held hands with them and kissed with them on his ranch and tell them the ground truth of what is happening in America The stranglehold of middle eastern oil is over for our country whether the president wants to declare independence or not we are. And we will achieve it," she added.
    New york senator Chuck Schumer went further in criticizing President George W. Bush and his oil policy calling it a "joke". "Last person in the world you want to make oil policy in America is George Bush. Because George Bush believes in his bones that what is good for Exxon Mobil is good for America," Schumer said.
    Strong demand in the United States was expected to lead to a draw-down in U.S. gasoline inventories, which are all-important in the run-up to the U.S. driving season, for the ninth week in succession.

    ECONOMICS FINANCE
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