IIA 

Calendar No. 736 

110TH CONGRESS 

2D SESSION S. J. RES. 32 

Limiting the issuance of a letter of offer with respect to a certain proposed 

sale of defense articles and defense services to the Kingdom of Saudi Arabia. 

IN THE SENATE OF THE UNITED STATES 

MAY 13, 2008 

Mr. SCHUMER (for himself, Mr. DORGAN, Mr. CASEY, Ms. KLOBUCHAR, and 

Mr. SANDERS) introduced the following joint resolution; which was read 

the first time 

MAY 14, 2008 

Read the second time and placed on the calendar 

JOINT RESOLUTION 

Limiting the issuance of a letter of offer with respect to 

a certain proposed sale of defense articles and defense 

services to the Kingdom of Saudi Arabia. 

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; 


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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; 


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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 Resolved by the Senate and House of Representatives

2 of the United States of America in Congress assembled, 

3 SECTION 1. LIMITATION ON CERTAIN PROPOSED SALES OF 

4 DEFENSE ARTICLES AND DEFENSE SERVICES 

5 TO THE KINGDOM OF SAUDI ARABIA. 

6 (a) LIMITATION.—The issuance of a letter of offer 

7 with respect to each proposed sale of defense articles and 


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1 defense services to the Kingdom of Saudi Arabia specified 

2 in subsection (b) is hereby prohibited unless the Kingdom 

3 of Saudi Arabia— 

4 (1) commencing not later than 30 days after 

5 the date of the enactment of this Joint Resolution, 

6 increases its oil production by 1,000,000 barrels of 

7 oil per day in excess of its oil production as of Janu8 ary 1, 2008 (as reported by the International En9 ergy Agency); and 

10 (2) maintains such increased oil production for 

11 not less than 90 days after the date on which such 

12 increased oil production is reached (as so reported). 

13 (b) PROPOSED SALES OF DEFENSE ARTICLES AND

14 DEFENSE SERVICES.—The proposed sales of defense arti15 cles and defense services to the Kingdom of Saudi Arabia 

16 specified in this subsection are the proposed sales as fol17 lows: 

18 (1) The proposed sale of defense articles and 

19 defense services to the Kingdom of Saudi Arabia de20 scribed in the certifications transmitted to the 

21 Speaker of the House of Representatives and the 

22 Chairman of the Committee on Foreign Relations of 

23 the Senate pursuant to section 36(b) of the Arms 

24 Export Control Act on October 4, 2007 (Transmittal 

25 Number 08–03). 


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1 (2) The proposed sale of defense articles and 

2 defense services to the Kingdom of Saudi Arabia de3 scribed in the certifications transmitted to the 

4 Speaker of the House of Representatives and the 

5 Chairman of the Committee on Foreign Relations of 

6 the Senate pursuant to section 36(b) of the Arms 

7 Export Control Act on December 7, 2007 (Trans8 mittal Number 08–28). 

9 (3) The proposed sale of defense articles and 

10 defense services to the Kingdom of Saudi Arabia de11 scribed in the certifications transmitted to the 

12 Speaker of the House of Representatives and the 

13 Chairman of the Committee on Foreign Relations of 

14 the Senate pursuant to section 36(b) of the Arms 

15 Export Control Act on December 7, 2007 (Trans16 mittal Number 08–29). 

17 (4) The proposed sale of defense articles and 

18 defense services to the Kingdom of Saudi Arabia de19 scribed in the certifications transmitted to the 

20 Speaker of the House of Representatives and the 

21 Chairman of the Committee on Foreign Relations of 

22 the Senate pursuant to section 36(b) of the Arms 

23 Export Control Act on January 14, 2008 (Trans24 mittal Number 08–18). 


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Calendar No. 736 

110TH CONGRESS 

2D SESSION S. J. RES. 32 

JOINT RESOLUTION 

Limiting the issuance of a letter of offer with reSaudi Arabia. cles and defense services to the Kingdom of spect to a certain proposed sale of defense artiMAY 14, 2008 

Read the second time and placed on the calendar 


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