Patrick, thanks for forwarding the LA Times article (OPE 6071) on decreasing reliance on Saudi and Gulf oil which has been a clear trend since the mid 70s, I believe. While the power of Gulf and OPEC producers to determine prices and output levels may have decreased over the last 25 years, any major interruption of supply could still pose grave problems. Fred is surely correct here. Of course if Saudi Arabia is to deplete its reserves to keep oil plentiful and cheap (though not so cheap that other indebted oil exporting states become too fragile and new exploration becomes uneconomical), the Saudis would presumably have to be convinced that there are strongly profitable outlets for the petrodollars that they are amassing. (Why the Saudi state is able to collect rent from the sale of oil brings us back to the the theory of differential and absolute rent; what Marx meant by the latter and whether Marx's concept are relevant to oil production are not clear to me.) at some level, the saudis have to believe that the value of the cash from oil sales will rise faster than the value of unlifted oil, or they may not be willing to provision the market today with cheap and plentiful oil. but if as a price for its provision of security the US govt dictates to the Saudis that their petrodollars must be used for the purchase of what Lawrence Summers once called in a different context "sterile assets"-- overpriced US treasuries, US arms, useless infrastructure--the saudis may reason that they have more to gain in economic terms from keeping more oil in the ground for sale tomorrow in a more favorable market than selling it cheap today for petrodollars which are then pulverized anyway through conversion into basically sterile assets. at any rate, there could be a reason why many in the Saudi elite may be supporting Osama bin Laden's attacks on the US. Rakesh
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