Oct. 16, 2018 - Steve Pieczenik
04:04
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| Time | Text |
|---|---|
| Hi, I'm Dr. | |
| Pechenna. | |
| Today I want to talk about the potential use of Saudi Arabian oil as a weapon against the United States. | |
| Secretary of State Pompeo has gone over to Saudi Arabia to sit down with the Crown Princes, in particular Mohammed bin Salman, who we've discussed in detail. | |
| The point he wants to bring up is the potential of two possible scenarios. | |
| One scenario is that Saudi Arabia will not buy $110 billion worth of military equipment from the United States. | |
| I don't think that scenario is going to be likely. | |
| I think Saudi Arabia will buy $110 billion worth of military equipment because they need military aid and they've been nurtured on military equipment for the past half century. | |
| The second scenario is the threat by Saudi Arabia that they can raise the price of oil from $70 a barrel to $100, even $200 a barrel. | |
| Now, let me explain to you why I didn't think that is credible. | |
| Number one, we have to understand that in the 1970s under President Jimmy Carter, we were totally but totally dependent on Saudi Arabia and the OPEC countries to import our oil. | |
| Now, since 2007, and I have to give credit to President Obama, under the Obama administration, we have been able to produce our own oil from 5 million barrels a day to 10.2 million barrels a day because of our increased capability in fracking and vertical technology and the ability to bring oil to the surface much more quickly. | |
| For the most part, we bring in most of our oil from the Permian Basin in West Texas and North Dakota. | |
| Plus, you have to remember, we have a major reserve, which is called the Strategic Reserve of Oil, of about $1 billion. | |
| Gallons of oil if we need it in case of an emergency. | |
| Well, in this case, we don't need it. | |
| If, in fact, the price of oil goes up, we can counteract that by lowering the price of our oil, which is $70 a barrel, as I said, Permian Basin or Sweet Texas oil or Brent oil, which comes out of the Norwegian areas where they which comes out of the Norwegian areas where they are on these oil drilling wells in the ocean. | |
| And we will always be $10 below that. | |
| In fact, what's happening is that we are so good at production of oil, we are basically bringing in 800,000 barrels of oil from Saudi Arabia, but we're exporting it. | |
| We have become, from an importer of oil, we have become the major exporter of oil all over the world, including China. | |
| So in effect, what this means is that Saudi Arabia's threat to increase the barrel of oil, the price of the barrel of oil, from $70 to $200 a barrel, does not affect the United States. | |
| It will, however, affect the world. | |
| It will affect Europe very much and it will create a major recession. | |
| It will affect other countries in South Asia, which are dependent on the oil, Pakistan, India. | |
| China will come in, Iran will substitute, and Russia will have to make up the difference. | |
| But for the most part, Saudi Arabia does not have an offensive weapon anymore in the oil cartel. | |
| So what is it that we've learned? | |
| We've learned to be much more effective in terms of drilling oil, preserving oil, and being able to turn from an importer to an exporter. | |
| That is very much along the ethos of an American entrepreneur. | |
| Let me quote you the famous billionaire, J.P. Getty. | |
| He said the following, To become rich, you get up early in the morning, work hard, and strike oil. |
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