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Bush Unable To Persuade Saudis To Lower Oil Prices

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By JAMES GERSTENZANG, Los Angeles Times

Published: January 16, 2008

RIYADH, Saudi Arabia - President Bush and Saudi leaders tangled Tuesday over the price of oil, with the president reminding this wealthy desert kingdom that U.S. purchases could fall if the American economy slipped because Saudis refused to commit his country to greater production to lower costs at the pump.

Bush said the price of oil, driven up by growing demand in the United States but an even greater increase in China and India, had become "painful for our consumers." He suggested that oil-producing nations open their spigots for their own good.

Producers should "realize that high energy prices affect the economies of consuming nations," he said. If those economies weaken, he said, they "will eventually be buying fewer barrels of oil."

Energy demand has "outstripped new supply," Bush said. "That's why there's high price."

Saudi Oil Minister Ali Ibrahim Naimi said his country was sympathetic to such economic worries, but he refused to commit to increasing production.

"The concern for the U.S. economy is valid," he said, "but what affects the U.S. economy is more than the price of oil." Still, he added, "We don't want to see the U.S. economy go into recession in the future."

The oil minister held out the possibility that his country might at some point increase its output of oil, a step that might lower consumer prices.

"We have no constraints on using it now or in the future," Naimi said of the possibility of tapping Saudi Arabia's unused production capacity.

Asked whether U.S. consumers would again see oil priced at $1 to $1.50 a gallon, Naimi cracked: "If I knew that, I'd be in Las Vegas, rather than here."

The U.S.-Saudi relationship is based foremost on oil, although the United States relies more heavily on oil from Canada and Mexico than it does on Saudi petroleum.

Differences between the two governments, however gingerly expressed, go beyond oil matters.

Foreign Minister Prince Saud al-Faisal parted company with the United States over Iran. He said that Saudi Arabia, like the United States, wants Iran to abide by U.N. demands that it stop trying to enrich uranium. However, he said Saudi Arabia sees Iran as a neighbor, and he would not speak harshly of it.

Historically, Saudi Arabia, led by Sunni Muslims, has been wary of Iran, in which Shiites hold sway.

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