"YOU NEED US more than we need you," said a high Saudi Arabian official over the weekend, as he was talking about American oil imports. The official was not identified in the news story, but we note that Sheikh Zaki Yamani, the Saudi oil minister, was in town. The remark was, in any case, accurate. We need the Saudis' oil a great deal more than they need our dollars. That's something for Americans to consider carefully. A relationship as badly unbalanced as ours with the Saudis is dangerous to both partners.
It's dangerous because Saudi policy in setting prices no longer has much to do with economics. It has becom wholly a matter of politics. The market puts no real restraints on the limit to which the Saudis could push those prices if they chose. Currently they are using this awesome power in the other direction, restraining the price increases demanded by some of their partners in OPEC. What do the Saudis seek in return for this restraint? American friendship, of course, and technical support in industrialization.
But there's a bit more. The Saudis have large political interests throughout the Middle East, and they naturally are going to expect assistance in pursuing them. Then there's still one more thing. The Saudis are a small population with very little capability to defend their country. The more that the world's economy depends upon their oil, the more obvious it becomes that - to put it gently - the United States has to gurantee the stability of the Persian Gulf region. For all these reasons, Henry Kissinger was dead right the other day when he reminded a congressional committee that this country's poor performance in energy conservation "impairs our national security."
American oil consumption last month was running about 18 million barrels a day, a fat 4 per cent higher than a year earlier. Since domestic production is still slowly declining, the imports make up the whole increase. The oil companies are now rebuilding inventories after the winter, and imports are running very high - 41 per cent over the level of this time last year, according to the Federal Energy Administration.
All the longstanding trends continue unchallenged. In 1973, before prices shot up, this country bought half of its imported oil from other Western hemisphere countries, mainly Venezuela and Canada. But both are cutting down exports - Venezuela to conserve declining reserves, Canada to fuel its own furnaces - while U.S. demands keep rising. Now most of our imported oil comes from the Arab countries and Nigeria. The proporation of our imports from the Arab members of OPEC was up to 38 per cent in 1976, compared with 22 per cent before the 1973 embargo. The Saudi official last weekend cheerfully assured his American listeners that five years from now the United States will regularly be importing well over half of its total oil requirements - including a massive 3.5 million barrels a day from Saudi Arabia alone.
There are two basic questions that an oil conservation policy has to answer. The first is how much the Unites States can afford to conserve without intolerable disruption. The other is how much it can afford not to conserve. A nation runs a very clear risk when its prosperity and economic stability depend on sheikhs who conclude that it needs them more than they need it.