oil - Saudi Arabia - United States

Bush talks oil and Iran in Saudi Arabia

Friday 16 May 2008

Following his trip to Israel, US President George W. Bush on Friday held talks in Saudi Arabia with King Abdullah to discuss soaring oil prices and Iran's growing influence in the Arab world. (Story: P.Robert, P.Hall)

Friday 16 May 2008

By Reuters

RIYADH, May 16 (Reuters) - U.S. President George W. Bush asked Saudi King Abdullah on Friday to help tame record oil prices but secured no concrete promises for an immediate increase in output.

On his second visit to the world’s biggest oil-exporter this year, Bush renewed his appeal for more oil from OPEC amid rising pressure at home to take action as record fuel prices weigh on the U.S. economy.

“The Saudi government has reiterated their policy that Saudi Arabia is willing to put on the oil market whatever oil is necessary to meet the demand of Saudi Arabia’s customers,” Bush’s national security adviser Stephen Hadley told reporters.

He said Saudi Oil Minister Ali al-Naimi had told Bush and other U.S. officials that “that policy, or even an increase in production is not going to result in some dramatic reduction in (gasoline) prices in the United States”.

Since Bush’s last visit to Saudi Arabia in January, oil prices have jumped some $30 to a new record near $128 a barrel on Friday, adding to U.S. recession fears.

White House spokeswoman Dana Perino said before the meeting that Bush would ask for an increase in supplies from OPEC, whose most influential member is Saudi Arabia.

“Clearly the price of (gasoline) is too high for Americans ... We have not enough supply and too high demand. Trying to get more supply out there is good for everyone,” Perino said.

“We have had sluggish growth; with lower oil prices we could certainly have better growth.”

COMMON GROUND ON IRAN

As Bush flew into Riyadh, the White House said the United States, the world’s largest energy consumer, had agreed to help protect Saudi Arabia’s oil resources and help it in developing peaceful nuclear energy.

“This agreement will pave the way for Saudi Arabia’s access to safe, reliable fuel sources for energy reactors and demonstrate Saudi leadership as a positive non-proliferation model for the region,” the White House statement said.

The announcement came as Bush ended a three-day trip to Israel where he vowed to oppose Iran’s nuclear ambitions.

Tehran says its programme is peaceful but Bush said it would be “unforgivable” if Iran were allowed to get the bomb.

Despite U.S. frustration over rising oil prices, the two leaders were on closer ground over Iran and it was all smiles and handshakes as King Abdullah greeted the president and first lady Laura Bush on the airport tarmac.

They then rode together in a limousine to the king’s sprawling horse farm outside Riyadh, the centrepiece of a visit the White House says is mostly to pay tribute to 75 years of formal ties between Washington and the Islamic kingdom.

The two leaders are trying to improve ties that deteriorated in the aftermath of the Sept. 11 attacks in 2001 and the U.S.-led invasion of Iraq in 2003.

The United States ended more than a decade of military operations in Saudi Arabia in 2003 amid resentment in the kingdom over the American military presence.

COOPERATION

As part of the new oil security arrangements announced on Friday, the White House said the two allies would conclude an agreement for broader cooperation between the Saudi Interior Ministry and the U.S. government, but gave no details.

Apart from agreements to cooperate on nuclear energy and oil security, the White House said Saudi Arabia had agreed to join two global initiatives—one to combat nuclear terrorism and another to fight the spread of weapons of mass destruction.

For his part, King Abdullah will be looking for reassurances on Bush’s commitment to push a $1.4 billion U.S. arms sale through an opposition-led U.S. Congress.

Democrats have threatened to block the deal to pressure Saudi Arabia to increase oil output. OPEC members have blamed high oil prices on speculators and not any shortage of supply.

Bush travels on to Egypt at the weekend to meet Palestinian leaders, and before then he will press the Saudis to do more to support faltering U.S.-sponsored Israeli-Palestinian peace talks. He wants to achieve a deal before he leaves office in January, but the deadline is widely regarded as unrealistic.