Riyadh
16 May 2008
Saudi Arabia is refusing a U.S. request to increase overall oil production as a way to lower record high energy costs. VOA White House Correspondent Scott Stearns reports from Saudi Arabia where U.S. President George Bush met Friday with King Abdullah.
It is the second time in four months that President Bush has come to Saudi Arabia asking King Abdullah to boost overall oil production to help drive down U.S. gasoline prices.
And it is the second time since January that the president got the same answer: No.
Soaring gasoline prices in the United States are partly to blame for the country's economic slowdown.
Speaking to reporters before this trip, President Bush said he would tell the Saudi king that U.S. gas prices are even higher now than they were in January. He said demand is so high relative to supply that there is just not a lot of excess capacity.
Saudi Oil Minister Ali al-Naimi says supply and demand are in balance. He told reporters in Riyahd that the country did boost output by 300,000 barrels a day last week but only to make up for declining production from Venezuela and Mexico.
Al-Naimi says Saudi Arabia is already investing $90 billion over the next four years to increase production and is doubling the capacity of a refinery in Texas. "So how much more does Saudi Arabia need to do to satisfy the people who are questioning our oil practices or our oil policy?" he asked.
U.S. National Security Adviser Steve Hadley says Saudi officials told President Bush that they do not believe an overall increase in production would dramatically reduce prices at U.S. pumps.
Hadley says Saudi officials argue that higher prices are driven more by uncertainty in the global market and the lack of refining capacity for the quality of oil most readily available. Hadley says the Bush Administration will take that explanation to its own analysts to see if it conforms with what they think.