Costly Oil a Peril, Bush Tells Saudis
CRAWFORD, Texas — President Bush told Crown Prince Abdullah of Saudi Arabia on Monday that soaring oil prices would damage the world economy, but he neither sought nor received a new commitment that Riyadh would immediately increase oil production, representatives for both governments said.
Instead, Bush favorably received a Saudi plan to increase investments in energy development, White House national security advisor Stephen Hadley said. He noted that the plan, which the Saudis had announced in November, "can't help but have a positive effect downward" on oil and gasoline prices.
Asked why Bush did not pressure the Saudis to help curb oil prices, Secretary of State Condoleezza Rice said the prices reflected a current problem in "supply and demand," with demand outpacing supply, caused by the booming economies of such nations as China and India.
"And those issues have to be addressed not by jawboning but by having a strategic plan for dealing with the problem," Rice said.
Crude oil prices on the New York Mercantile Exchange are within sight of the $57.27 closing high set April 1, and many analysts see little hope that Saudi Arabia will take action to bring prices down. After rising four straight days last week, the price of light, sweet crude oil -- one of the main oil price benchmarks -- fell 82 cents Monday to $54.57 a barrel. That oil is prized because of its low sulfur content, which makes it easier to refine.
In their meeting, held exactly three years after Abdullah's first visit to Bush's ranch, the president and the crown prince discussed several issues, including the Middle East peace process and Saudi Arabia's efforts at democratic reform, officials said.
"The atmosphere was very positive," Hadley said.
When Abdullah arrived at the ranch, Bush and the Saudi leader embraced lightly and exchanged kisses on the cheek. Bush then grasped Abdullah's right hand and slowly escorted the 81-year-old prince to the house.
Under pressure from the U.S. and other countries to increase oil and gas output, Saudi Arabia said last week that it would double its investments in energy development to $50 billion by the end of the decade.
Specifically, Saudi oil minister Ali Ibrahim Naimi said the desert kingdom would increase its oil-pumping capacity to 12.5 million barrels a day by 2009. The Saudis have been pumping 9.5 million barrels a day, the production cap set by the Organization of the Petroleum Exporting Countries, but Naimi said they would immediately increase that to 11 million barrels -- the country's current production capacity.
