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Gas is cheap in Saudi Arabia

Yet, another reason for oil prices to artificially high. I truly don’t believe that anyone has a good handle on gas prices. There aren’t enough refineries in the US some say. Why not? Because, in my humble opinion, there is no downside for oil companies to choke of gas supplies and allow the price to rise. If they make too much gas then gas prices fall. Therefore, no new refineries. By choking off supply at the refinery level the oil companies build a cushion or a supply of crude just in case something happens. Hugo Chavez goes nuts or a Russian pipeline blows.



In Saudi Arabia gasoline costs about 45 cents a gallon. In Iran it’s 33 cents. Venezuelans pay less than a quarter.

These absurdly low prices are a direct result of massive government subsidies.

While these numbers are not adjusted for cost of living, it’s fair to say that drivers in those countries are getting a good deal.

But it’s straining government budgets. More importantly, it’s not allowing the free market to do its job. Higher prices on the open market are not leading to a drop in demand, which is keeping the cost of oil high for everyone else.

“Roughly two-thirds of new oil demand is coming from countries that have subsidized oil markets,” said Christopher Ruppel, a senior geopolitical analyst with the consulting firm John S. Herold. “So demand is not going to be affected if oil goes from $60 a barrel to $80.” (more…)

By |2007-05-07T20:08:53-04:00May 7th, 2007|Big Oil|Comments Off on Gas is cheap in Saudi Arabia

Cheney in Saudia Arabia

Why won’t our President be Presidential?  Doesn’t he need to take charge?  Don’t send Cheney.  Do something yourself!  His Presidency is being blown up in Baghdad.  Shouldn’t he do something?


Vice President Dick Cheney is on his way back to Washington after a daylong whirlwind meeting with Saudi Arabian King Abdullah.

Cheney and King Abdullah met Saturday for several hours on issues key to both nations — including the latest developments in Iraq, Iran’s growing influence in the region, the status of Hamas in Gaza, Syria’s diplomatic status, and Syria’s influence in Lebanon’s government, a Saudi adviser told CNN.

Saudi Arabia believes Iran is using its influence in Syria to help rearm Hezbollah in Lebanon and is undermining Lebanon’s already fragile Western-backed government, said the adviser.

The brevity of Cheney’s visit underlies the growing sense of urgency after a series of events highlighting an increasingly unstable Middle East. more

By |2006-11-25T19:09:20-04:00November 25th, 2006|Foreign Affairs, Iraq|Comments Off on Cheney in Saudia Arabia
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