If you do a search for "the Saudi Arabia of...". Google returns around one million hits, from "Maine to become the Saudi Arabia of wind" to "Mongolia: the Saudi Arabia of Coal" to "America, the Saudi Arabia of plastic packaging" to, well you get the idea. As far back as 2009 Kate Galbraith did a post at the NYT's Green blog that asked readers for suggestions on replacing the trope. Not gonna happen.
In March 4's "Are the Saudis Using Oil to Block Obama’s Reelection?" we got an indication of how concerned the Kingdom is about a nuclear Iran. In Friday's "OPEC: 'Saudi Arabia Books Most Oil Tankers to Supply U.S. in Years"' we saw some shadows whose underlying reality might be a hint at what's going on in an oil market that seems murkier than usual.
Today FT Alphaville adds another piece to the puzzle:
Something of a strange one this. Every analyst and his dog has for the longest while been preaching that demand for crude post-crisis has really been all about emerging market demand… that the US, by and large, has become increasingly irrelevant when it comes to global supply and demand.I will be referring back to this idea.
Yet, from Reuters last week, we had this:
NEW YORK/LONDON, March 16 (Reuters) – Saudi Arabia is preparing to extend this year’s unexpected surge in oil sales to the United States, according to tanker industry sources and government data, adding to speculation about the response of the world’s top oil exporter to sanctions against Iran and a rally in prices.Why, oh why is Saudi sending so much oil to the United States? Everyone, as Reuters notes, was expecting imports destined to US refiners to fall. This was especially the case given that the Seaway pipeline was to start running from Oklahoma to Texas by July, eliminating so-called “Cushing syndrome“, which had for the longest while clogged crude flows, especially those originating from Canada, in one very over-supplied part of the US market.
Contrary to expectations that the modest recent rise in the kingdom’s output was bound for fast-growing Asian markets, preliminary data shows that shipments to the United States have quietly risen 25 percent to the highest level since mid-2008, when the OPEC kingpin was driving up production to knock oil prices off record highs near $150 a barrel.
One man has a theory....MORE