May 16, 2008 4:00 pm US/Pacific
Saudis Nix Bush Appeal To Boost Oil Production
RIYADH, Saudi Arabia (CBS) ―
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President George W. Bush walks with King Abdullah Bin Abdull-Aziz Al-Saud of Saudi Arabia, at Royal Terminal King Khalid International Airport, Riyadh, Saudi Arabia on Jan. 14, 2008
AP
The White House says Saudi Arabia's leaders are making clear they see no reason to increase oil production until customers demand it.
President Bush was in the oil-rich country Friday to appeal to King Abdullah for greater production to help halt rising gas prices in the United States.
But his national security adviser, Stephen Hadley, says Saudi officials stuck to their position that they already are meeting demand.
Hadley told reporters, "What they're saying to us is ... Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy."
President Bush's one-day visit to Saudi Arabia was a second stab at getting the oil-rich nation to increase production and drive down the soaring gasoline prices hurting U.S. consumers.
When Mr. Bush met with King Abdullah in mid-January, the president asked Saudi Arabia to raise production to ease high prices at the pump. Mr. Bush got a chilly response to his plea. The kingdom said it would increase production only when the market justified it, and that production levels appeared normal.
The White House had tried to lower expectations prior to the meeting, saying the Saudis are already pumping about as much oil as they can, reported CBS News senior White House correspondent Bill Plante.
The president said he'd ask again for more oil, but he and the king were much more likely to talk about Iran, Plante reports. The Saudis share a real concern over Iran's nuclear ambitions and they wish the U.S. would do something about it.
When Air Force One landed in the Saudi capital on Friday, the president got a red carpet welcome on the tarmac and was warmly greeted by Saudi leaders as a military band played the U.S. national anthem, slightly off-key.
Mr. Bush was spending the day with Abdullah at his horse farm outside Riyadh, talking mostly out of public view over three tea services and two meals.
The White House says the president's visit is intended, in part, to celebrate 75 years of formal U.S.-Saudi relations. It will mark the conclusion of several agreements, laying out intentions to cooperate on nuclear energy, infrastructure protection and nonproliferation. But the rising price of oil undoubtedly will overshadow the talks.
Mr. Bush concedes that raising output is difficult because the demand for oil - particularly from China and India - is stretching supplies. Besides, any production hike might not lower prices that much. Some economists say those prices are being driven up by increased demand, not slowed production.
Mr. Bush's visit to Saudi Arabia, which has the world's largest supply of oil, comes a day after Congress voted to temporarily halt daily shipments of 70,000 barrels of oil to the nation's emergency reserve. Mr. Bush has refused to stop pouring oil into the Strategic Petroleum Reserve, saying the stockpile was meant for emergencies and that halting the shipments would have little or no impact on gasoline or crude oil prices.
It's a move that Democrats have sought for the past year to increase supply and apply downward pressure on prices. With an eye to the November election, the Senate sent the measure to the president Wednesday night without a single GOP objection. The White House has indicated that Mr. Bush will sign the reserve measure.
Also, as Mr. Bush prepared to leave Washington, Senate Democrats introduced a resolution that would block $1.4 billion in arms sales to Saudi Arabia unless Riyadh agrees to increase its oil production by 1 million barrels per day. The Democrats said they introduced the measure to coincide with Mr. Bush's trip to send a message to Saudi Arabia that it should pump more oil to reduce the cost of gas for Americans.
High energy costs are a major drain on the U.S. economy, which is experiencing a slowdown that some think is already a recession. Oil prices are nearly $125 a barrel and gasoline threatens to go to $4 a gallon this summer.
Anthony Cordesman, a security analyst for the Center for Strategic and International Studies, said Abdullah may produce something "simply because it's good manners," but nothing that would have a significant effect.
"U.S. influence over OPEC and Gulf oil production is diminished," he said. "It's not clear what the incentive is to Saudi Arabia. We can't deliver on (Mideast) peace. We can't deliver on arms transfers. We can't deliver on the Iraq that Saudi Arabia wants. We are raising problems in terms of Iran. And the reality is the market isn't being driven by us; it's being driven by China, by India, by rising Asian demand."
Jon Alterman, director of the CSIS' Middle East program, said the Saudis, with a public that doesn't like Mr. Bush and a ruling monarchy with growing interests elsewhere, are not likely "to put themselves out to help this president."
"The Saudis don't have an alternative to keeping the U.S. in its corner, but their reliance on the United States, their confidence in the United States is extremely shaken," Alterman said.
Besides wanting to discuss oil, Mr. Bush is paying his second visit to Abdullah this year - on top of a stop by Vice President Dick Cheney in Saudi Arabia in March - to talk about his goal of achieving an Israeli-Palestinian peace deal before he leaves office. Saudi Arabia's immense power in the region means that its backing of Palestinian President Mahmoud Abbas and any concessions he will have to make is key.
The Saudi-American relationship began in the 1940s with a simple bargain: Saudi Arabia offered oil in return for U.S. protection. The United States became the kingdom's biggest trading partner and the Saudis became the biggest buyers of U.S. weapons. Many Saudis sent their children to American schools.
But over the years, issues arose.
Saudis, like other Arabs, feel Washington leans unfairly to Israel's side in the dispute with the Palestinians.
And Saudi-U.S. ties took their hardest hit after the Sept. 11, 2001, attacks, in which 15 the 19 airline hijackers were Saudis. Americans blamed Saudis for allowing the religious extremism that gave rise to the hijackers. Though anti-terror cooperation has been relatively strong since, Saudis still smart from what they feel are unfair accusations.
Mr. Bush flew to Saudi Arabia from Jerusalem where he helped celebrate Israel's 60th anniversary of its founding, but left with no movement on Mideast peace negotiations.
"What's on my mind is peace," Mr. Bush told a group of Israeli youth leaders gathered for a short talk with him at the Bible Lands Museum, dedicated to the history of civilizations in the Bible. "I believe it's possible. I know it will happen when young people put their minds together."
But Mr. Bush's second trip to Israel in four months ended without progress.
The two sides have been negotiating since December, but nothing visible has emerged from the secretive process. Both the Israeli and Palestinian leaders are weak among their own constituencies and fresh violence from the Gaza Strip and settlement activity by Israelis are diminishing an already precious supply of trust. The president did no negotiating while he was here. In a much-anticipated Knesset speech on Thursday, he only gently urged Mideast leaders to "make the hard choices necessary," but made no mention of concrete steps.
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