Bush counts on his influence over OPEC

WASHINGTON, April 2 (IslamOnline.net & News Agencies) – The world’s biggest oil exporter Saudi Arabia – after oil supplies have become a hot political issue in the U.S. in this election year – sent mixing signals on the issue.

Hours after defending the decision of OPEC (the Organization of Petroleum Exporting Countries) to cut back on world production by one million barrels per day for April, the Kingdom sought to reassure incumbent U.S. President George W. Bush that it “will act to counter any oil shortage on the world market”.

Saudi Ambassador to the United States Prince Bandar bin Sultan declared the his country’s pledge after his sudden appearance at the White House Thursday, April 1, to meet Bush.

"We will not allow any shortage on the world oil market," said the Saudi envoy. "Oil prices should be between 22 and 28 dollars (a barrel). My government's target is 25 dollars," according to Agence France-Presse (AFP).

This came as OPEC, of which Saudi Arabia is the biggest exporter, declared cutting back on world production, a move that threatened to raise already record high U.S. gasoline prices.

Current oil prices are around 35 dollars a barrel.

"We will monitor the market closely in the coming days," said the envoy.

Prince Bandar further said he had given Bush a message from Saudi Crown Prince Abdullah Bin Abdul Aziz, stating that high oil prices would have an "adverse effect" on the world economy.

He said Saudi Arabia had now, however, pressured OPEC to cut production, saying there was a debate to try and determine whether production was not in fact too high.

"The market is acting in strange ways" currently, said Prince Bandar, as a number of countries seek to replace supplies used up during the winter months.

Bush had come under fire from Democrats over the issue of oil prices.

"I know that he (Bush) has had conversations with ... most of the leaders of OPEC," U.S. Energy Secretary Spencer Abraham told a House Energy and Commerce Committee hearing, held with U.S. motorists paying record retail gasoline prices averaging $1.76 per gallon, Reuters reported.

Gasoline prices paid by U.S. drivers have hit record levels in recent weeks becoming a key issue for Bush as he campaigns for re-election in November.

Defending Cut

Democrats accuses OPEC of “making a fool of the United States”

However, Saudi Arabia also defended OPEC's decision to cut oil output, saying there was an oversupply and blaming price rises on speculators and concerns about Iraq.

Saudi Foreign Minister Prince Saud al-Faisal, in Austria as part of a state visit, told reporters his country had not been contacted by the U.S. administration about oil prices.

"There was an oversupply in the market," he said.

He said an initial drop in prices after the decision proved he was right.

In sterner tones, however, Saudi foreign affairs spokesman Adel al-Jubeir, said those criticizing the OPEC production cuts "should educate themselves about the realities of the market."

The price cuts were "very responsible" and are aimed at maintaining a balance of supply and demand, al-Jubeir said in a telephone interview from Vienna with a group of Washington reporters.

He blamed the high oil prices in part on market "speculators" and concerns in the market about Iraq and about terrorism and said there is plenty of oil.

He dismissed the public criticism by the Bush administration and some members of Congress, saying politics "have a lot to do with the charges leveled by the administration."

White House spokesman Scott McClellan said the Bush administration has made known its disappointment with the OPEC cuts.

"We expressed publicly our disappointment ... and we will continue to stay in close contact with OPEC as we have been since the decisions." He sidestepped questions about to what extent U.S. officials had discussions with Saudi officials ahead of this week's OPEC meeting.

"We've certainly been in contact with Saudi Arabia previously," said McClellan.

Hot Political Issue

According to Reuters, some Democrats, seeking to unseat Bush in the November election, reportedly intend to target the relationship between Riyadh and Bush, a former Texas oilman who said during the 2000 election that a president must get "on the phone with the OPEC cartel and say 'we expect you to open your spigots'."

In the Senate, the No. 2 Democrat, Harry Reid of Nevada, blamed Saudi Arabia for restricting world supplies.

"We have been a much better friend to Saudi Arabia than they have been to us. They were a leader ... of this cabal to cut production," Reid told reporters.

Over at the House hearing, Massachusetts Democrat Edward Markey told Abraham: "OPEC is making a fool of the United States."

Rising oil prices threatened to revive tensions between the United States and Saudi Arabia, even as the desert kingdom cooperated more in the U.S.-led war on terrorism, Reuters said.

“Despite decades of close ties, the U.S.-Saudi alliance was strained by the fact that 15 of the 19 hijackers in the Sept 11, 2001, attacks were Saudis. For a time, Riyadh was seen as dragging its feet in the war on terrorism.”