I saw the representative of the Saudi prince in a fairly long interview last night on PBS. He said that the Saudis sit on about 1/3rd of the worlds proven oil reserves. Iran and Iraq, he said, sits on another 1/3rd.

The fellow said that while Iraq, Iran and the Saudis aren't that close, the internal Saudi situation is such that what is perceived as an anti-Muslim stance, for instance allowing Sharon full rein, would be unacceptable unless the US can demonstrate it is not anti-Islam. The Saudis would be driven into a much closer relationship with those countries.

He was implying that 2/3rds of the worlds proven oil reserves would be in the hands of people with no particular interest in making life easier for Americans.

He didn't say this, but they also know the US has an energy intensive economy and will pay whatever it has to for fuel. Currently gas in the US costs about 40% of what much of the rest of the world pays, and Americans would pay a lot, lot more. Would change the quality of life, and almost cause a revolt, though.

Doubling the cost of oil would have a profound impact upon the US economy, and could well drive a recession if not depression.

And the oil-producing countries can make almost as much money selling less at a higher price. The Western nations will buy. The "spot" oil market is a "free" market, and withholding relatively small amounts of oil can cause a dramatic increase in price. In fact we've depended upon the Saudis to pump more when the prices get out of hand.

That dynamic isn't going to get better, either. It might, but I don't think so. This is another development which is an unintended consequence of the Israeli settlement-building.

Arf