Whereas record-high gasoline prices are placing
considerable fiscal strain on American households that are already burdened by
a weakening United States economy;
Whereas the increase in gasoline prices is principally due
to the increasing price of crude oil, which has reached a price of more than
$120 per barrel in recent weeks, the highest price on record in
inflation-adjusted terms;
Whereas, because United States gasoline refiners must
purchase crude oil on the world market, the price they pay is highly sensitive
to crude oil production decisions made by entities with significant shares in
the market;
Whereas since 1973, the Organization of the Petroleum
Exporting Countries (OPEC) has cartelized the crude oil market, effectively
controlling the supply and price of petroleum products;
Whereas the Kingdom of Saudi Arabia, through the
nationalized oil company Saudi Aramco, controls 98 percent of the more than
260,000,000,000 barrels of crude oil reserves in Saudi Arabia, and daily
production of crude oil in Saudi Arabia constitutes more than 10 percent of the
world daily production of crude oil;
Whereas, as the dominant member of Organization of the
Petroleum Exporting Countries, the Kingdom of Saudi Arabia has historically
exercised considerable market power by producing between 1,000,000 and
5,000,000 barrels of crude oil per day below its maximum daily capacity;
Whereas in April 2008, crude oil production by the Kingdom
of Saudi Arabia was nearly 2,000,000 barrels per day below its maximum daily
capacity;
Whereas crude oil production by the Kingdom of Saudi
Arabia in 2007 was approximately 800,000 barrels per day less than in
2005;
Whereas energy economic analysis has determined that,
holding world demand constant, an increase by one percent of the crude oil
supply of the world results in a reduction by between 20 percent and 25 percent
in world crude oil prices in the near term;
Whereas, according to this analysis, an increase in crude
oil production by the Kingdom of Saudi Arabia by 1,000,000 barrels per day,
which would result in an increase in world crude oil supply of more than one
percent, could—
(1)reduce world oil
prices by between 20 percent and 25 percent, and result in a reduction in the
price of a barrel of crude oil by more than $25 per barrel from the current
price of $126 per barrel; and
(2)in turn, reduce
the price of gasoline by between 13 percent and 17 percent, or by more than 62
cents off the expected summer regular-grade price of $3.66 per gallon;
Whereas, despite the refusal of the Kingdom of Saudi
Arabia to increase its oil production, the Administration continues to reward
Saudi Arabia with lucrative arms deals;
Whereas, since October 2007, the Administration has
offered to sell the Kingdom of Saudi Arabia $1,400,000,000 worth of arms,
including 900 Joint Direct Attack Munition (JDAM) kits, which are applied to
conventional bombs to make them laser-guided bombs; and
Whereas the Administration should cease the sale of
weapons to Kingdom of Saudi Arabia unless and until it increases its production
of crude oil: Now, therefore, be it
1.Limitation on certain
proposed sales of defense articles and defense services to the Kingdom of Saudi
Arabia
(a)The
issuance of a letter of offer with respect to each proposed sale of defense
articles and defense services to the Kingdom of Saudi Arabia specified in
subsection (b) is hereby prohibited unless the Kingdom of Saudi Arabia—
(1)commencing not
later than 30 days after the date of the enactment of this Joint Resolution,
increases its oil production by 1,000,000 barrels of oil per day in excess of
its oil production as of January 1, 2008 (as reported by the International
Energy Agency); and
(2)maintains such
increased oil production for not less than 90 days after the date on which such
increased oil production is reached (as so reported).
(b)Proposed sales
of defense articles and defense servicesThe proposed sales of
defense articles and defense services to the Kingdom of Saudi Arabia specified
in this subsection are the proposed sales as follows:
(1)The proposed sale
of defense articles and defense services to the Kingdom of Saudi Arabia
described in the certifications transmitted to the Speaker of the House of
Representatives and the Chairman of the Committee on Foreign Relations of the
Senate pursuant to section 36(b) of the Arms Export Control Act on October 4,
2007 (Transmittal Number 08–03).
(2)The proposed sale
of defense articles and defense services to the Kingdom of Saudi Arabia
described in the certifications transmitted to the Speaker of the House of
Representatives and the Chairman of the Committee on Foreign Relations of the
Senate pursuant to section 36(b) of the Arms Export Control Act on December 7,
2007 (Transmittal Number 08–28).
(3)The proposed sale
of defense articles and defense services to the Kingdom of Saudi Arabia
described in the certifications transmitted to the Speaker of the House of
Representatives and the Chairman of the Committee on Foreign Relations of the
Senate pursuant to section 36(b) of the Arms Export Control Act on December 7,
2007 (Transmittal Number 08–29).
(4)The proposed sale
of defense articles and defense services to the Kingdom of Saudi Arabia
described in the certifications transmitted to the Speaker of the House of
Representatives and the Chairman of the Committee on Foreign Relations of the
Senate pursuant to section 36(b) of the Arms Export Control Act on January 14,
2008 (Transmittal Number 08–18).
May 14, 2008
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