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FOR IMMEDIATE RELEASE: February 11, 2004

SCHUMER: OPEC'S LATEST PLAN TO CUT OIL SUPPLIES WILL PUSH NEW YORK GASOLINE AND
HOME HEATING COSTS THROUGH THE ROOF

Saudi-dominated OPEC yesterday announced million-barrel-a-day production cuts and plans for another 1.5 million-barrels-a-day in future cuts

With Crude Oil prices already skyrocketing, Schumer urges President to stand up to Saudis and tap petroleum reserves to bring prices down

One day after the Organization of Petroleum Exporting Countries (OPEC) announced that it will cut oil production by a million barrels a day and also laid out new plans for another 1.5 million barrels a day in additional cuts, US Senator Chuck Schumer today urged President Bush to stand up the Kingdom of Saudi Arabia and tap American petroleum reserves to help bring oil prices down. Crude oil prices are already skyrocketing from yesterday's decision and Schumer is concerned that increased gasoline and home heating oil prices in New York aren't far behind.

"This move by the Saudis is profit taking plain and simple – it has no other purpose other than to maximize OPEC's profits by making us pay through the nose to fill up our cars and heat out homes," Schumer said. Enough is enough. It's time that we stand up to the Saudis and tell them we won't take it anymore. The alarm bells are ringing – we have the oil reserves, and it's time to use them."

Yesterday, OPEC announced that it intends to withdraw 1 million barrels of crude oil a day from the world's markets in April, which would lower the OPEC's production objective to 23.5 million barrels a day. OPEC members also promised to reinforce their self-imposed quotas and cut production by another 1.5 million barrels a day. These cuts were spearheaded by Ali al-Naimi, the oil minister of Saudi Arabia, OPEC's pivotal and most productive member. They are the second and third OPEC production cuts in less than five months.

As a result of these cuts, crude oil prices immediately rose 3 percent in New York yesterday, and Schumer said he is concerned that this will quickly result in higher gasoline and home heating prices. In a letter to President Bush, Schumer urged him to release fuel stocks from the Strategic Petroleum Reserve immediately to prevent significant gas and heating oil prices spikes.

The Strategic Petroleum Reserve currently holds about 640 million barrels of oil and is being filled to a level of 700 million barrels. \ As gas prices soared during the summer and fall of 2000, President Clinton responded to Schumer's repeated calls to tap into the Strategic Petroleum Reserve by releasing 30 million barrels over 30 days. Prices quickly fell by over 10 percent, and helped stabilize gas prices for nearly a year. The Clinton Administration then replaced those 30 million barrels in the SPR by purchasing fuel at the new, lower prices, thereby providing gas price relief at a net savings to taxpayers.

Schumer also took OPEC to task for their statements that they cut production to pre-empt developments that might cause oil prices to decline – namely increased production by Russia, Norway or other producing nations that do not belong to OPEC. Schumer has long championed increasing bringing more non-OPEC oil to New York, and in September joined Russian President Vladamir Putin to open a new chain of gas stations in the metropolitan area that only sell gas made from Russian oil.

"It's incredible that at the first sight of a little good old fashioned economic competition, OPEC immediately resorted to tactics to take advantage of New Yorkers. Oil from places other than the Middle East is the first chink in their armor. They're scared that their cartel will crumble – but that doesn't mean we should let them ride roughshod over us," Schumer said.

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