Dear Cyrus, Thanks much for the wealth of knowledge that you have sent me. I shall be reading and thinking through these important analyses this week. In the NYT Neela Banerjee has been reporting that the Sa'udis are selling oil at some kind of discount to downstream American companies as a way of ensuring US support for the House of Sa'ud. The more American oil companies depend on 'cheap' Sa'udi oil, the more the House of Sa'ud can count on US political support. She has reported that the oil could be sold at a higher price to Asian refineries. This would seem to suggest that some of the differential Arab rent is appropriated directly by downstream American firms. For example, in using netback deals (yergin, p. 748), wouldn't the Sa'udis be agreeing to limit severely their take of the differential rent? I want to get this point straight because it seems that not only in Saudi Arabia but also in the NYT there remains the myth of there being cheap Sa'udi oil that has been given up to US firms for essentially *political* reasons. But of course you have challenged the whole idea of "cheap" and "expensive" oil. All the best, Rakesh
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