President Obama said today in an interview that he wants Saudi Arabia to produce more oil.
Tackling the surging price of gasoline has now moved to the front of American voters’ minds as the United States moves closer to the 2012 election season. President Obama has very little ability to change the rise in gas prices, but he can use his bully pulpit to lay blame on any number of culprits, which would include oil producing states like Saudi Arabia.
According to this article which appeared in Bloomberg via the AP, President Obama said in Detroit yesterday:
“We are in a lot of conversations with the major oil producers like Saudi Arabia to let them know that it’s not going to be good for them if our economy is hobbled because of high oil prices.”
Undoubtedly, soaring gas prices hurt the average American, already struggling to make ends meet. But Americans have done nothing to curb demand on their end. As we discussed in an article last week on Arabianomics:
“American desire for gasoline is a problem that is not easily fixable, by any means. But a bad place to start is by blaming the wrong perpetrator, in this case, OPEC, instead of realizing that this is our problem, NOT OPEC’s fault. Sure, they’re producing a lot of the oil that we need so badly, but oil producing states are merely merchants on the international stage, selling their national treasures to countries that lack it. It would be different if those countries were in total control of the flow and price of oil, but they’re not – speculators and traders on Wall Street and in London are determining just how much oil costs, and producing states are watching them drive up the price with glee, understanding that traders, and not producers, are to blame for high prices.”
In reality, our use of gasoline does not change based on prices, so it makes sense that prices are high, whoever is to blame for them. That is, regardless of whether or not prices soar, Americans, at least for now, will keep buying gasoline.
Expect more of the same from US politicians on both sides of the aisle as they jockey for the hearts and minds of the gas-guzzling American middle class. Discussing the issue of high gas prices, and the ensuing blame game sure to follow, Caroline Baum of Bloomberg writes:
“If the current situation adheres to the standard script, the Senate will invite executives of Big Oil to testify about Big Profits at a time when ordinary Americans are hurting.”
Saudis, both officials and citizens, should both brace for the onslaught of blame from frustrated American drivers and take that blame with a grain of salt.