WORLD_ Obama's Failed Saudi Relations Could Spike Oil Prices

OP/ED
10/24/2013 @ 8:28PM |608 views

Carrie Sheffield, Contributor
Committed to free minds + free markets.

Obama's Failed Saudi Relations Could Spike Oil Prices


The Obama administration’s strategic blunders with Syria and Iran have morphed into a diplomatic disaster with Saudi Arabia, a development that threatens the American economy should tensions escalate further and trigger a dramatic spike in oil prices.

It’s unconscionable that President Barack Obama would put American interests in such a precarious position during our fragile economic recovery. While America has made strides in lessening dependence on foreign oil thanks in part to the domestic shale boom, we’re still heavily reliant on Saudi Arabia (second only to Canada for oil imports to the United States), a dominant member of the Organization of Petroleum Exporting Countries (OPEC).

Yes, that same OPEC that was a driving force behind sky-high oil prices of the 1970s that led to fuel shortages in America. What’s different this time around is that rather than punishing America for supporting our democratic ally, Israel, the Saudis are furious at American cowardice surrounding Syria’s unfolding humanitarian crisis. Obama’s reneging on enforcing his “red line” against Syrian President Bashar Assad’s use of chemical weapons led the Saudis to draw down their support of rebels fighting against Syria’s governing regime.

The Saudis are also upset that the White House and State Department are beguiled by Iran’s new president, Hassan Rouhani. Rouhani’s recently made all the right noises for rapprochement on its nuclear program, yet earlier this year he went on Iranian television and showed his true colors, beating his chest about how while serving as a nuclear negotiator with the West he helped expand Iran’s nuclear program in violation of a 2003 deal with the watchdog International Atomic Energy Agency. In the words of Bloomberg’s Jeffrey Golberg, Rouhani believes he’s “devised a way to carry [the nuclear program] to completion: By speaking softly, smiling and spinning the centrifuges all the while.”

Saudi Arabia is by no means a paragon of human rights, and no doubt part of its anger over the warming U.S./Iranian relationship is related to the Western oil embargo on Iran, which if lifted would introduce greater competitive pressures on the Saudis. Fortunately the threat of oil prices spiking hasn’t materialized immediately, and prices weren’t terribly impacted by the Arab Spring.

But this development with Saudi Arabia is a unique petrol-related threat against the United States that we didn’t face with Egypt, Tunisia or Libya (the Benghazi embassy tragedy was a singular rather than systemic threat). And it’s a warranted, harsh rejection of the Obama administration’s weakness and failure to show true courage and leadership in the Middle East. Saudi Arabia’s resoundingly clear anti-Washington warning—manifest by its rejection of a seat on the United Nations Security Council after previously lobbying for it—could be the first moves of a downward spiral that results in pain for the U.S. economy.

Read more: http://www.forbes.com/sites/carriesheffield/2013/10/24/obamas-failed-saudi-relations-could-spike-oil-prices/




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