Bush talking to Saudi king about high oil prices

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Tuesday, January 15, 2008
— President Bush on Tuesday nudged OPEC powerhouse Saudi Arabia and other cartel members to produce more oil, recognizing that soaring prices are straining the U.S. economy.

Bush said he is speaking with Saudi King Abdullah, whose nation holds the world’s largest oil reserves, about the situation that has seen the per-barrel price briefly top $100 this month and U.S. pump prices jump past $3 a gallon.

“Oil prices are very high, which is tough on our economy,” Bush said. “I would hope, as OPEC considers different production levels, that they understand that if ... one of their biggest consumers’ economy suffers, it will mean less purchases, less oil and gas sold.” The Organization of Petroleum Exporting Countries next meets Feb. 1 in Vienna, Austria, to consider increasing output.

Bush spoke before a discussion at the U.S. Embassy with Saudi entrepreneurs. While the president stuck to his schedule, Secretary of State Condoleezza Rice slipped away from the Saudi capital for an unannounced visit to Baghdad for talks with Prime Minister Nouri al-Maliki. One of his aides said Rice encouraged the prime minister to speed progress of legislation on provincial elections, constitutional amendments and a law to share oil and gas resources among the different sects.

Rice was en route to the Iraqi capital when the White House informed reporters traveling with the president. There was speculation before Bush left Washington last week on his eight-day Mideast trip that he would be the one to stop in Iraq.

Oil prices also came up during other stops on Bush’s trip, largely in the context of his push for alternate fuels and sources of energy. White House counselor Ed Gillespie said Mideast leaders have talked to Bush about “the vast demand that’s on the world market today for oil.” He said that was “a legitimate and accurate point.”

In the U.S., high costs for fueling cars and heating homes are leaving people with less money to spend elsewhere, and prices for some other goods and services also have risen.

OPEC oil accounts for about 40 percent of the world’s needs, and OPEC ministers often follow the lead of the Saudis when discussing whether to increase production to take the pressure off rising prices. The Saudis’ views carry great weight because Saudi Arabia is responsible for almost one-third of the cartel’s total output.

Bush spoke before meeting with Saudi business owners, many of them young and educated in the United States. The group included two women. Bush appealed to one of Saudi Arabia’s biggest complaints when he acknowledged the tight visa restrictions his administration set after Sept. 11, 2001, on Saudis trying to visit the U.S. The kingdom was the homeland of 15 of the 19 hijackers involved in the terrorist attacks.

“The United States benefits when people come to my country,” Bush said. “And one of my concerns was after September the 11th that our visa policy, particularly for Saudis, was tightened to the point where we missed opportunity to show young and old alike what our country is really about.”

Later Tuesday, Bush visited al-Murabba Palace and The National Museum, stopping in a gallery describing the Prophet Muhammad’s life. The president paused to look at a 136-year-old handwritten Quran that was opened to a page filled with gold and turquoise decorative script.

Afterward, he was traveling to Al Janadriyah Farm, the king’s country retreat where he maintains 150 Arabian stallions. That trip repays the two visits that the king, while crown prince, made to Bush’s ranch in Crawford, Texas, in 2002 and 2005.

Bush received a warm embrace from Abdullah upon his arrival in the kingdom Monday. Among ordinary Saudis and across much of the Mideast, Bush is unpopular, particularly because of the Iraq war and unflinching U.S. support for Israel. Bush and Abdullah were emphasizing their strong personal ties.

Abdullah presented Bush with what appeared to be a medallion of gold with white and green stones, suspended from a gold palm tree emblem with crossed swords. Bush, who dislikes late nights, stayed up well past his regular 9:30 p.m. bedtime for after-dinner talks with the king.

Earlier Monday, Bush delivered a sophisticated weapons sale for Saudi Arabia, trying to bolster defenses against threats from U.S. adversary Iran and muster support in this oil-rich kingdom for a long-stalled Mideast peace agreement.

Coinciding with Bush’s arrival, the administration officially notified Congress it will offer Saudi Arabia sophisticated Joint Direct Attack Munitions – or “smart bomb” – technology and related equipment. The deal envisions the transfer of 900 of the precision-guided bomb kits, worth $123 million, that would give Saudi forces highly accurate targeting abilities.

Some lawmakers fear the systems could be used against Israel. Congress, however, appears unlikely to block the deal because of Saudi Arabia’s cooperation in fighting terrorism and deterring Iran.

The U.S. already has notified Congress of five other packages to Saudi Arabia, the United Arab Emirates and Kuwait, including Patriot missiles. The total amount of eventual sales as part of the Gulf Security Dialogue is estimated at $20 billion, a figure subject to actual purchases.

The sales are an important element in Bush’s strategy to shore up defenses against Iran, which the president has branded the world’s top state sponsor of terrorism. Saudi Arabia and other Gulf states, with majority Sunni Muslim populations, are suspicious about Shiite Iran’s rising power and want to make sure the U.S. remains committed to keeping Tehran’s ambitions in check. Arab allies are worried that the world economy would suffer heavily if the U.S. dispute with Iran turns into a military confrontation.

Last updated: 2:06 pm Thursday, December 13, 2012

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