The U.S. may be edging closer to energy independence, but in the oil markets and its prices, Saudi Arabia is king.
Saudi Aramco, Saudi Arabia's oil company, has recently chartered 11 very large crude carriers (VLCCs). Each transports as many as two million barrels of oil.
They were chartered earlier in March with one goal in mind: to dump their cargo with U.S.refiners, and help bring energy prices down by increasing the supply of oil, reported the Financial Times.
In so doing, they ensure that sanctions against Iran do their job, said Marvin Zonis, professor emeritus at the Booth School of Business at the University of Chicago, who's followed Iran more than 40 years.
Zonis said Iran's saber rattling about closing the Strait of Hormuz had prompted traders to inflate the price of oil, which helps offset oil sanctions against Iran for its nuclear program by lining Tehran's coffers with more cash.
A barrel of oil sold for $105.51 on the New York Mercantile Exchange on Thursday -- about 33 percent above the October low.
The more oil prices ease, the more Iran will be squeezed, Zonis said.
On Tuesday, Saudi Arabia's oil minister Ali Naimi commented oil prices are unjustifiably high and that his country would boost its production by 25 percent if necessary.
It's part of a multi-pronged attempt to reel in and cool energy prices which have triggered fears of a slowdown in the world economy.
Oil prices acorss the globe dropped by more than $1 on Tuesday following assurances Saudi production will offset Iranian declines in production.
Tankers Give More Controls
By chartering the tankers, Saudi Aramco essentially increased by 50 percent the total number Saudi Arabia owns or controls.
The CIA reports the country had 22 petroleum tankers out of a fleet of 74 cargo ships in 2010.
Last year, the country chartered only one VLCC to the U.S., the Financial Times reported.
With Saudi Arabia as the world's largest producer and exporter of oil, Saudi Aramco's venture into oil transport will only cement the country's influence on oil prices.
It is hard to exaggerate the control on oil markets that Saudi Arabia has already, Zonis said. It is the largest single influence on the oil market.
The professor said chartering the tankers only further proves Saudi Arabia's dominance.
The reason is that with proven reserves of 266.7 billion barrels, the Arab kingdom could be the world's biggest oil producer for many more years.
It certainly confirms that you don't want to mess with Saudi Arabia, Zonis said
The tankers will make their way into the Gulf of Mexico by the end of March or the first week of April, after sailing for 40 days.