The newest boom sparked by rising U.S. oil and gas production appears to be in articles about the troubled U.S.-Saudi relationship. The latest installment, provoked by the Iran nuclear deal over the weekend, ran today on A1 in the New York Times. “When you look at our differing views of the Arab Spring, on how to deal with Iran, on changing energy markets that make gulf oil less central,” Greg Gause tells the Times, “these things have altered the basis of U.S.-Saudi relations.” “New sources of oil,” the Times informs us, “have made the Saudis less essential.”
The chart at the top of this post ought to put this myth to rest. U.S. imports of oil from Saudi Arabia in August 2013 (the last month for which data is available) were 1.332 million barrels a day. That is higher than for 251 of the 479 months that have passed since the October 1973 oil embargo. Most of the time in which U.S. imports were lower was during the 1980s and 1990s – a period when the U.S.-Saudi relationship was generally solid. In August 1990, when Iraq invaded Kuwait and set off U.S. panic about the potential threat to Saudi oil – ultimately leading to the first Gulf War – the United States imported 1.189 million barrels a day from the Kingdom. That’s less than it does today.
To be certain, the United States does not “depend” on shipments of Saudi oil in the way that many imagine, with a devastating embargo possible at any moment. And the precise volume of Saudi sales to the United States, whether high or low, shouldn’t matter much. That’s not because of the U.S. oil boom; it’s because global markets are well integrated. But, like all consumers, the United States depends on the continued flow of Saudi oil into the world market to keep prices at the pump manageable. It also depends on Saudi use of its spare capacity to moderate volatility in the global oil market.
The U.S.-Saudi relationship is going through a difficult time. U.S. policies toward Egypt, Syria, and now Iran are worrying leaders in Riyadh. That’s coincided with a boom in U.S. oil production. But it would be wrong to confuse correlation with causation in this case.