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Oil Efforts Are Best Possible, Saudis Say
Bush Unable to Win Concessions Likely to Lower Gasoline Prices

By Michael Abramowitz
Washington Post Staff Writer
Saturday, May 17, 2008

RIYADH, Saudi Arabia, May 16 -- Saudi leaders told President Bush on Friday that they are doing all they can to increase oil production, gently turning aside the president's efforts to bring down prices more rapidly.

After a meeting with Bush and his advisers Friday afternoon, Saudi Oil Minister Ali al-Naimi announced that the kingdom decided last week to increase production by about 300,000 barrels a day to meet increased demand from customers for June. That would take Saudi production to 9.4 million barrels a day. The kingdom's production capacity is 11.3 million barrels.

The Saudi increase is modest and appears unlikely to have much effect on record crude oil prices. Despite the announcement, crude oil prices in New York climbed $2.17 to $126.29 a barrel.

With the president under pressure at home to show he is fighting to lower gasoline prices, the Saudi gesture gave Bush a face-saving outcome after a day of meetings with Saudi leaders. Bush has invested enormously in improving his personal ties to King Abdullah, and administration officials say the effort has paid off in greater cooperation in fighting terrorism, confronting Iran and other shared concerns.

But the limits to this warmth were on full display as Bush arrived in Saudi Arabia for his second visit of the year and was whisked off for private consultations and dinner with the king at his palatial horse farm near Riyadh. Not only did the Saudis resist efforts to boost production even more -- as many congressional leaders are demanding -- they also pointedly said that the extra output was a week-old response to commercial customers, not to the president. And they made clear their unhappiness with Bush's emotional speech Thursday to the Israeli Knesset.

In the address, Bush touched only lightly on the Palestinian quest for a state, while paying homage to the 60th anniversary of the Jewish state -- a contrast that deeply angered many Arabs. "It was so one-sided," said Saudi academic and writer Khalid al-Dakhil. "The president is supposed to be evenhanded."

Foreign Minister Saud al-Faisal voiced disappointment in remarks to reporters. "We are well aware of the special U.S.-Israeli relationship," he said. "Stressing the right of a nation to exist should not strike out or revoke the rights of other nations." The Palestinians "are in dire need to enjoy their rights," he said.

White House officials dismissed the suggestions that the president is insufficiently committed to his goal of an Israeli-Palestinian peace deal by the end of the year, and said Bush will renew his efforts on Saturday when he meets with Palestinian Authority President Mahmoud Abbas in Egypt.

After a detailed briefing for the president by the Saudi oil minister, White House officials also seemed satisfied with Saudi explanations that they are investing billions to expand their production capability over the next several years and that there is not much more they can do to lower prices. White House officials said Bush asked the Saudis to increase production as much as they can but made no specific numerical demand.

"I think the message the Saudis were sending was, 'We're doing everything we can to meet this problem, but it's a complicated problem and the underlying causes of these high gas prices are going to take time and money to address,' " national security adviser Stephen J. Hadley told reporters.

Congressional Democrats were critical. "The president seems to value his friendship with the Saudis more than his obligation to help the American people with gas prices," said Sen. Charles E. Schumer (D-N.Y.)

The unwillingness of the Saudis to do more to relieve the pressure on prices is described by some Middle East analysts and politicians as emblematic of what they call a one-way relationship.

"The Saudis have taken the measure of the administration and found they can convey their concerns to the administration, but they are not required to do much in return," said Dennis Ross, a Middle East envoy in both Democratic and Republican administrations.

At the news conference Friday evening, Naimi bristled at the suggestion that Saudi Arabia has been anything but cooperative with the United States. "How much more does Saudi Arabia need to do to satisfy the people who are questioning our oil policy?" said Naimi, adding that the Saudis are spending $90 billion to ramp up production over the next four years. The Saudis say they need to maintain "spare capacity" in the event of an emergency.

Bush's apparent rapport with the king has helped rescue a relationship that has been strained by the Israeli-Palestinian dispute, the Sept. 11, 2001, terrorist attacks and the Iraq war. Abdullah seems to take pride in the relationship, frequently asking emissaries from Bush how the president and his family are doing. The king does not trust the telephone to be secure, so contacts are usually by personal visits or emissaries.

To highlight the 75th anniversary of the Saudi-U.S. relationship this year, the two countries announced new agreements to cooperate on nuclear energy, nonproliferation and other issues.

Abdullah infuriated U.S. officials when he appeared before Arab heads of state last year and described the American presence in Iraq as an "illegitimate foreign occupation." A few months later, Vice President Cheney -- who is also highly respected by Abdullah -- flew to Riyadh to meet with the king and try to dampen Sunni Arab efforts to look for alternatives to the Maliki government in Baghdad. "Cheney stopped that in the tracks," said one U.S. official.

Another source of tension is the financing of terrorists. Saudi promises to set up a charities commission to regulate the flow of money that U.S. officials believe is supporting terrorism have not materialized, according to current and former U.S. officials. In little-noticed Senate testimony last month, the top U.S. official tracking terrorist financing portrayed a mixed picture of cooperation.

"They are serious about fighting al-Qaeda in their kingdom, and they do," said Stuart A. Levey, a Treasury undersecretary, who added that the same "seriousness of purpose" has not extended to combating financing for terrorists. "Saudi Arabia today remains the location from which more money is going to Sunni terror groups and the Taliban than from any other place in the world," Levey said.

One area of agreement between Abdullah and Bush is Iran, which they both see as waging a proxy war against U.S. and Saudi interests through allies in Lebanon, Iraq, the Palestinian territories and elsewhere. If anything, officials familiar with the king's views say, the king is even more hawkish than Bush and concerned about what he believes is Tehran's march through the Middle East. Abdullah wants to see the Bush administration bring greater pressure on Iran.

The last time Bush visited the kingdom, in January, Abdullah expressed dismay that U.S. warships buzzed by Iranian speedboats had not simply blown the tiny vessels out of the water, according to sources familiar with their meeting.

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