Saudi official says oil supply not cause of high gas prices

A spokesman for the Kingdom of Saudi Arabia says — despite popular opinion — officials in his country aren’t happy to see oil prices hit record highs. Nail Al-Jubeir is the director of the Information Office for the Saudi Arabian Embassy in Washington D.C. He says high prices do not help his country in the long run as they create recessions around the globe and that leads to a drop in demand for energy. Al-Jubeir says his country has increased the amount of oil they’re pumping and can up it some more, but he says that won’t help. He says the biggest problem with energy is not the supply, he says it’s “the downstream, when you have problems with shipping, when you have problems with storage, when you have problems with refinery.” He says they’re long-term issues “we can export the oil, but what good is it when nobody can refine it.” Al-Jubeir says a “Fear Factor” has also pushed up the price of oil. He says about 10 dollars per barrel is based on simple a fear of what will happen, “the war in Iraq, instability in Venezuela, the crisis in Nigeria, the issues with the oil companies in Russia, as well as fear in Saudi Arabia.” He says people who speculate in the price of oil also drive up the price. Al-Jubeir says his country wants to work with the U.S. in increasing the supply of gasoline– but he says the refinery situation gets in the way. He says, “What we have been telling our friends in the United States is, we’re willing to send you whatever refined gasoline you need, but it’s difficult to do that when you have different regional formulas. When you have a refinery in Springfield, Illinois, I think ,that produces gasoline that can’t be sold in Chicago because of the blend, it is not helpful.” Al-Jubeir says the U.S. needs one standard blend for gas. He says they’ve suggested using the highest environmental standard the country is willing to accept and make it the national standard. And he says the U.S. has not built a new refinery in 30 years. He says he understands there are environmental concerns involved in building new refineries, but he says his country has built new refineries with no problems. He says, “These refineries were built by American engineers, American technology. If they can build them in Saudi Arabia safe for 30 or 40 years, one would assume they can do the same thing here.” Al-Jubier says people don’t believe his country doesn’t want higher oil prices, but he says their budget is based on a certain level of income, and large fluctuations don’t help them. Al-Jubier spoke in Des Moines Monday as part of a program for the Greater Des Moines Alliance.