US President George W. Bush, left, walks with Saudi King Abdullah, right, during his arrival at Royal Terminal King Khalid International Airport, Monday, Jan. 14, 2008 in Riyadh, Saudi Arabia.
(Pablo Martinez Monsivais/AP Photo)
Saudis See No Reason to Raise Oil Production Now
Saudis tell Bush they see no reason to raise oil production until their customers demand it
Saudi Arabia's leaders made clear Friday they see no reason to increase oil production until customers demand it, apparently rebuffing President Bush amid soaring U.S. gasoline prices.
It was Bush's second personal appeal this year to King Abdullah, head of the monarchy that rules this desert kingdom that is a longtime prime U.S. ally and home to the world's largest oil reserves. But Saudi officials stuck to their position that they will only pump more oil into the system when asked to by buyers, something they say is not happening now, the president's national security adviser told reporters.
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"Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy," Stephen Hadley said on a day when oil prices topped $127 a barrel, continuing to set records. "What the Saudis wanted to tell us was we're doing everything we can do ... to meet this problem, but it's a complicated problem."
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The Saudi oil minister, Ali al-Naimi, said the kingdom decided on May 10 to raise production by 300,000 barrels, at the request of customers, and that increase was sufficient.
"Supply and demand are in balance today," he told a news conference. "How much does Saudi Arabia need to do to satisfy people who are questioning our oil practices and policies?"
Hadley also said the Saudis briefed Bush again on their plan to increase their production capacity over time. They also argued that even an increase would be unlikely to bring down the soaring prices, driven more by uncertainty in the market, lack of refining capacity for the type of oil readily available and other complicated dynamics, he said.
Economists say prices are being driven up by increased demand, not slowed production. Energy-guzzlers China and India are stretching supplies.
As a result, Hadley suggested the White House was satisfied with — or at least accepted — the Saudi response. He added, however, the Bush administration will see if the explanation "conforms to what our experts say."
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