Demand patterns for world oil and oil products show significant diversity by country, region, and product groupings. As a result of this diversity it is not possible to attach blame for the current level of price to any one nation, region, or product segment. The view that the oil market is international in scope and tightly interrelated is enhanced by the demand data. As a result of the integrated nature of the world oil market it is unlikely that any one nation acting on its own can implement policies that isolate its market from broader price behavior. As new major oil importers, notably China, and potentially India, expand their demand, the oil market likely will have to expand production capacity. This promises to increase the world’s dependence on the Persian Gulf members of the Organization of Petroleum Exporting Countries, especially Saudi Arabia, and maintain upward pressure on price.

This report discusses the current state of the kingdom of Saudi Arabia, its current relationship with the United States, and future initiatives to further develop U.S.-Saudi relations.

The kingdom of Saudi Arabia, ruled by the Al Saud family since its founding in 1932, wields significant political and economic influence as the birthplace of the Islamic faith and by virtue of its large energy reserves. This report provides background information about Saudi Arabia and analyzes current issues in U.S.-Saudi relations.