Saudis reject Bush's appeal to ease oil prices

Taken from The Guardian, UK, May 16 2008

By Haroon Siddique and agencies

Saudi Arabia today rebuffed George Bush's appeal to increase production and help cut record oil prices, the White House said.

It was the second time this year that the pleas of the US president, who is visiting King Abdullah, have fallen on deaf ears.

Bush's latest request came as the price of crude oil hit a new high of more than $127 (£65) a barrel.

"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," the US national security adviser, Stephen Hadley, told reporters.

However, the oil minister, Ali Naimi, said later that Saudi Arabia had raised production by 300,000 barrels per day on May 10 in response to requests from its customers. He said the increase would push the kingdom's output to 9.45m barrels a day by June.

High petrol prices are a potential issue in November's US presidential election. When Bush made his first appeal in January the Saudi oil minister said that oil production was at normal levels and the kingdom would raise production only when the market justified it.

Bush has conceded that raising output is difficult because the demand for oil — particularly from China and India — is stretching supplies.

The price of crude oil has consistently traded at new highs this year since hitting $100 a barrel at the beginning of January.

UBS yesterday became the latest bank to predict the price of crude oil could hit $200, with its analysts saying that the figure could be reached by 2015.

The US Congress yesterday voted to halt daily shipments of 70,000 barrels of oil to the US's emergency reserve in a bid to push down prices.

Bush had argued that halting the shipments would have little or no impact on petrol or crude oil prices.

The US Energy Department said later it had cancelled shipments into the reserve, beginning in July. But the White House has indicated that he will sign the reserve measure.

Senate Democrats have introduced a resolution that would block $1.4bn in arms sales to Saudi Arabia — the world's biggest oil supplier — unless it agrees to increase its production by 1m barrels a day.

The Democrats said they proposed the measure to coincide with Bush's visit to send a message to Saudi Arabia that it should produce more oil to reduce the cost of petrol for Americans.

While demand has surged because of booming economies in developing countries, political tensions in Nigeria, Venezuela and Iran have threatened supplies.

Before Bush arrived in Saudi Arabia, the US said it had agreed to cooperate to protect Saudi Arabia's oil and to help it develop peaceful nuclear energy. Saudi Arabia accounts for more than a tenth of global oil output and severe damage to its infrastructure would have far-reaching effects.

Al-Qaida has threatened more strikes on Saudi oil facilities after a failed attack on the world's largest oil processing plant at Abqaiq in February 2006.

"The United States and Saudi Arabia have agreed to cooperate in safeguarding the kingdom's energy resources by protecting key infrastructure, enhancing Saudi border security, and meeting Saudi Arabia's expanding energy needs in an environmentally responsible manner," a White House statement said.

The two countries will also sign a memorandum of understanding to cooperate on a peaceful nuclear programme

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In short the demand from India and China have meant that there is greater demand for oil but the supply of oil should not be attributed to Saudi Arabia. What is the oil production of illegally occupied Iraq, or friends of the United States Iran and Venezuela? How come Bush is not requesting more output from these countries? Saudi Arabia have stated numerous times that they do not fix price or output for political gain, if the roles were reversed and Capitalist America had all the oil no doubt they would cream off as much money as possible from any would be customers - why is there so much hatred of the Saudis in the media?

One thing is for certain if the price is too high, the United States will drop it's capitalist philosophy and show it's facist face and invade Saudi Arabia like it planned in the early 1970's -(when Israel instigated and won the the 1973 Arab-Israeli war). So would the United States really invade? Thanks to the release of British records - we find that a British intelligence committee report from December 1973 said America was so angry over Arab nations' earlier decision to cut oil production and impose an embargo on the United States that seizing oil-producing areas in the region (Saudi Arabia, Kuwait and Abu Dhabi ) was "the possibility uppermost in American thinking." Click here for more info: usatoday.com - 01-01-2004 and SundayTimes 09-02-1975.