Page last updated at 23:56 GMT, Tuesday, 15 January 2008

Bush concern over high oil prices

President Bush and Saudi King Abdullah 15.01.08
The Bush family has long been close to the Saudi royal family

US President George W Bush, on the second day of a visit to Saudi Arabia, has raised concerns over oil prices.

Mr Bush made the comment in a meeting with Saudi business leaders and later took the concerns about the effect on the US economy to King Abdullah.

Saudi Oil Minister Ali al-Naimi said the kingdom would boost production only if the market justified it.

Saudi Arabia is the world's biggest oil exporter and a leading member of the oil producers' cartel Opec.

Mr Bush said "high energy prices can affect economic growth because it's painful for our consumers... [and] could cause the US economy to slow down".

He added: "I would hope that as Opec considers different production levels that they understand that if... one of the biggest consumers' economy suffers it means less purchases, less oil and gas sold."

Israel and Iran were the other key issues that have dominated the agenda of the trip.

Saudi discontent

The BBC's Matthew Price, who is travelling with the president, says both countries have a vested interest in oil prices.

The Saudi currency, which is tied to the US dollar, has weakened along with it.

This has fostered some discontent among Saudi citizens, our correspondent adds.

Saudi Foreign Minister Saud al-Faisal and Condoleezza Rice
Saud al-Faisal and Rice did not fully agree on Israel and Iran

Nevertheless, the Saudis have argued in recent months that Opec's supply of oil has nothing to do with the price of the commodity.

The Opec secretary general has said the group will raise oil output if needed, but that supply is enough for now.

He blamed price speculation and political tension for the rise in oil prices.

On Israel, US Secretary of State Condoleezza Rice said Arab nations should do more to reach out to Israel to push forward the peace process.

However, the response from Saudi Foreign Minister Saud al-Faisal was cool.

"I don't know what more outreach we can give to the Israelis," he said.

On Iran, too, there was a clear difference.

Mr Bush said he had asked King Abdullah and other Gulf states to "make it clear to nations that do business with Iran that if we want to solve this diplomatically, there needs to be pressure on the regime".

The Saudi foreign minister said: "Iran is a neighbouring country, an important country in the region. Naturally we have nothing bad against Iran."

On Wednesday President Bush continues his Middle East tour with a visit to Sharm El-Sheikh, Egypt, where he will meet with President Hosni Mubarak.

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