Saudi oil analysts hit back at Trump remarks

Saudi oil analysts hit back at Trump remarks
3 min read
29 March, 2016
Oil analysts from Saudi Arabia have responded to comments by US presidential candidate, Donald Trump who hinted he might boycott Saudi oil if he wins the presidential election.
Withdrawal of US import from Saudi Arabia would make no difference, analysts say [Getty]

Saudi oil analysts responded to Donald Trump's comments in which he suggested boycotting the purchase of Saudi oil if elected, describing them as "worthless and incorrect".

The kingdom exports more than 7.8 million barrels of crude oil internationally and is not limited to a particular markets, the analysts said.

But the increase in shale oil production has declined the US import of Saudi crude oil to one million barrels per day, equivalent to about 13.3% of the kingdom's oil export or 10.5% of total production.

"Every barrel of oil produced by Saudi Arabia has a well-known buyer and will not remain unsold," Othman Khwaiter, vice president of Aramco said, stressing that the US cannot withhold purchasing overseas oil.

"Trump's remarks are worthless and are no more than a media stunt," he told The New Arab.

"The situation is very different to what it was 20 years ago," he added. "Back then it was somewhat difficult to find customers due to the volume of the market, however supply and demand are much closer and every production has its customer. No one can threaten another with withdrawing purchase of oil."

International observers say that the kingdom's behaviour in the past year is due to its recognition of the shrinking demand for crude oil from the United States, suggesting the Asian oil market was seeing growth.

But Khwaiter insists the US Bet on shale oil is deluded as the country consumes much more than it produces, meaning Washington will still need to depend on imported oil.

Trump's threats confirm that presidential candidates are unfamiliar with managing the nation's largest economic affairs in the world, he suggests saying "all candidates have regurgitate this similar rhetoric for the past 30 years but they do not have the power to do so. The president has no authority over purchasing or selling of oil, for this reason Trump's comments are worthless."

Despite using an estimated 19 million barrels of oil per day, the US only produces 10 million barrels.

But economic analyst, Rabea Sanadi believes a US boycott of Saudi oil will not affect the kingdom's economy.

"For years Saudi Arabia has pursued a new economic policy that drifts away from US influence and this is something that angered officials in Washington, Sanadi told The New Arab.

Saudi Arabia's dependence on the US has lessened, even in regards to the arms industry, he suggested, adding "most American politicians are familiar with the kingdom's diverse international allies but it seems like Trump is in another world. He simply does not know how to run the state's affairs- the US economy is built on oil imported from abroad."

Earlier this week, controversial presidential candidate Donald Trump said he would consider stopping purchasing oil from US ally Saudi Arabia if he were to become president.

The Republican suggested the kingdom would lose out on business with the US if it does not provide soldiers to help fight Islamic State militants.

The comments were made in an interview on foreign policy published by the New York Times, where Trump covered issues surrounding oil, nuclear weapons and the Israel-Palestine issue.

"The reason we're in the Middle East is for oil, and all of a sudden we're finding out that there's less reason to be there now," Trump said, adding that the United States provides its allies with protection "free of charge".

"We're not being reimbursed for the kind of tremendous service that we're performing by protecting various countries. Now Saudi Arabia's one of them.

"If Saudi Arabia was without the cloak of American protection, I don't think it would be around," he said.