A COLD WEATHER WAVE HITS America's northeast, oil inventories are drawn down, and prices rise. A pipeline is blown up in Iraq, and prices rise even more. The OPEC cartel meets and agrees to cut back production, adding to price pressures. The government announces a rise in inventories, or weather forecasters predict a thaw, or the Saudis say they will step up oil production, and prices fall. All interesting, all important to those playing the oil market or running companies that rely heavily on oil as an input, or trying to predict the course of their economies.

But these hardy perennials of the business pages will soon seem trivial next to the structural changes occurring in the international oil industry. Start with the much-overlooked fact that President Bush's inaugural address was nothing less than a repudiation of a deal cut 60 years ago by President Franklin Roosevelt with Saudi king Ibn Saud. FDR took a detour en route to Washington from the Yalta conference to meet with Saud aboard the USS Quincy, anchored in the Great Bitter Lake in the Suez Canal. "The official record was surprisingly silent about what the two men said about oil," notes Daniel Yergin in his magisterial The Prize: The Epic Quest For Oil, Money & Power, and Roosevelt died before he could make a full report. But no one doubted that the president had pledged U.S. support for the Saudi regime in return for Saud's promise of a steady flow of oil onto world markets.

It is certainly arguable that the Saudis reneged on their end of the bargain long before Bush decided to consign the Bitter Lake arrangement to the dustbin of history. After all, their "guarantee" of a continued flow became inoperative when they joined the producers' embargo in 1973. More recently, they abandoned their reasonable-price pledge by allowing oil prices to shoot up without making any effort to expand production capacity. Nor can it be said that a regime that uses its oil revenues to fund the export of the virulent version of Islam that produced almost all of the terrorists who perpetrated the atrocities of September 11, and that pays bounties to the families of suicide bombers, is behaving in the way Roosevelt anticipated when he shook hands with Ibn Saud.

But if Saudi behavior is not a deal-breaker, George W. Bush's inaugural broadside against tyranny--against "governments with long habits of control"--certainly is, unless the long-standing Bush family relationship with the Saudis trumps the president's pledge. If Bush means what he says, and he usually does, he cannot favor the existing regime over such reform elements as might begin to emerge in Saudi Arabia. The kingdom will remain an important supplier of oil to the U.S. and world markets, and America will remain an important consumer of that oil, but it will be barrels-for-dollars from here on out, with no hidden promises to shore up the Saudi regime unless those threatening to replace it are an even greater threat to American interests. Which should please those eager to distance America from the odious House of Saud.