But yes, the Saudis could certainly do a better job explaining their policies.

Vertically-integrated companies are considered illegal in the US only when the reach a point where they push out competitors unduly. I don’t think we have to worry about the KSA reaching that point any time soon. Even if it did, US laws affect US companies, not foreign states.

‘Xenophobia’ seems to be a best-selling brand of breakfast food. It’s so much easier to blame the other guy than admit your own mistakes.

Uh, John I think you’re mixing things up here. The Saudis have invested billions in new, higher-cost production facilities and are bringing them on line. They seem to be idling their existing low-cost wells. That normally falls under the classification of production management, and if the Saudis said so I’d accept that, but instead what they are doing is grousing.
Since the Sauds have afflicted themselves with sovereign control over oil production, is it not their duty to bend over backwards if they wish to convince others that oil decisions are being made for business purposes, rather than political ones? Certainly I suspect that they are out to score political points with disaffected (read: poor or Al Qaeda-oriented) Saudis at the very least.

As for Congress’ threats, I agree with your assessment, with one proviso: what looks like the formation of vertically-integrated “trusts” may violate U.S. laws. Ownership of a sizable percentage of production, distribution, and value-added products in the petroleum industry will be seen as encouraging monopoly pricing by economists. So maybe the Saudis should be more interested in making refrigerators and less interested in producing plastics.

Invade the KSA? What do these people have for breakfast, a bowl of stupid? No matter what we eat for breakfast, we Americans will do O.K., but it’s easy to imagine some people starving because of the higher food prices.

Congress’ popping off with threats to somehow punish the Saudis by limiting sovereign funds investments or halting arms sales (which are also in the US interest) are both annoying and counterproductive.

Oil prices are pinching some people, though. I’m seeing right-wing blogs taking up the ‘Let’s invade the KSA’ theme again. It’s still as stupid an idea as it ever was, but it’s out there.

They didn’t have to get burned. If they had employed the oil futures markets more extensively back then they would have been only slightly singed, and if they employed them more actively now they would have an assured return.

I see only three possibilities as to why the Saudis won’t increase production: (1) either they lack managerial competence, (2) they are practicing the usual sort of resource management that Western businesses do, or (3) they wish to employ oil as a personal or political tool.

Until now I would have picked number 2, for the oil companies do not lack competent management. Yet that was NOT the reason the Saudis gave, instead they voiced alleged past disappointments with their customers – grievances not much different in character than those voiced by Al Qaeda after 9-11 about the West “stealing” oil by paying too little for it.

So either for personal, domestic, or foreign policy purposes the Saudis are choosing to employ oil as a kind of weapon. In doing so they have pushed prices to the point that alternative energy development is once again a reasonable endeavor, and the high price of oil plus energy-diverted agricultural production means world food prices have skyrocketed and systemic inflation is setting in.

Am A long time reader, First time commenter.

As a Saudi myself i kind of find it odd how the US wants SA to produce more OIL as its not going to benefit the Avrage US consumer in a way that will be noticeable(petrol prices wont go down that much), Nor will it benefit SA in any way besides losing money and More reserves.

i suspect the true meaning behind the bush visit was to help sign more military defense contracts, and the More Oil production thing is just another way to justify selling SA Arms.

just my 2 cents.