Democratic senators Charles Schumer of New York, Byron Dorgan of North Dakota and others have called on the White House to use its leverage to convince Opec members to boost output or “risk Congress holding up … arms deals with Saudi Arabia, the United Arab Emirates and other Opec members,” according to a statement from the lawmakers. “The Bush administration has refused to be tough with so-called Opec allies and in fact continues to provide huge arms deals, despite the economic pains taxpayers are feeling,” the senators stated in the advisory.
The Bush administration is in a delicate position on Middle East policy, and record-high oil prices near $ 120 a barrel are just one of many complicated issues in the region. President George W. Bush has repeatedly nudged Opec members like Saudi Arabia to boost output, but is also trying to use US arms sales to offset Iran’s influence in the Middle East. The lawmakers’ plan is “the wrong approach when it comes to our security and our energy,” White House spokesman Scott Stanzel said, criticizing Democrats for blocking plans to drill for oil in an Alaska wildlife refuge. “Arms sales to our allies are made because they are in the national security interests of our country, not because they are a bargaining chit,” Stanzel said. The Bush administration has notified Congress it plans to sell Saudi Arabia bomb-guidance kits worth about $ 120 million.
The administration also wants to sell the United Arab Emirates and Kuwait advanced antimissile systems, as part of a potential $ 10 billion arms package to Gulf Arab states. Big Opec suppliers like Saudi Arabia have repeatedly blamed high oil prices on a lack of spare refining capacity and speculation, not a lack of oil supplies.
“Limited capacity along the entire supply chain is the real source of current global supply tightness,” Saudi Oil Minister Ali Al Naimi told a high-profile energy conference in Rome this week. The White House would likely veto efforts to link Middle East arms sales to oil prices, said Greg Priddy, an analyst with the Eurasia Group.
“Even in a Democratic administration they are certainly going to want the Gulf Arabs to have defensive capabilities vis-a-vis Iran,” Priddy said. Though U.S. lawmakers are quick to blame Opec for soaring oil prices, “the cartel has really lost control of the market at this point,” he said. Tying oil prices to arms sales could motivate Middle East producers to seek cozier arms-for-oil agreements with countries such as Russia and China to the detriment of US security interests, said Frank Verrastro, an energy expert at the Center for Strategic and International Studies. “Coupling arms sales to production increases could actually harm the U.S. more than the targeted countries in the Middle East,” Verrastro said. But “when you have a big hammer … everything looks like a nail,” he said.
