Saudi Arabia raises oil output

Increase of 300,000 barrels per day is announced as US president visits Riyadh.

    King Abdullah, left, will host President Bush at his horse farm on the outskirts of Riyadh [AFP]
    King Abdullah led a red-carpet welcome for Bush and his wife Laura as he landed at King Khaled airport.
    Before Bush arrived in Saudi Arabia, Dana Perino, White House spokeswoman, told reporters that oil supply would be on the agenda.
    "We do count on the Opec (Organisation of Petroleum Exporting Countries) to keep adequate [oil] supplies out there, so the president will talk again with the king about that," Perino said.
    Since Bush's last visit in January, oil prices have jumped nearly $30, to a record high of $128 a barrel.
    The recent price increases have fuelled US fears of recession and mounted political pressure on the White House in a year when voters will pick Bush's successor.
    Nuclear co-operation
    A White House statement on Friday said the US has agreed to help protect the resources of Saudi Arabia and help it develop peaceful nuclear energy.
    "The United States and Saudi Arabia have agreed to co-operate in safeguarding the kingdom's energy resources by protecting key infrastructure, enhancing Saudi border security, and meeting [its] expanding energy needs," the statement said.
    "The US and Saudi Arabia will sign a memorandum of understanding in the area of peaceful civil nuclear energy co-operation."
    The announcement came as Bush ended a three-day trip to Israel where he vowed to oppose Iran's nuclear ambitions.
    King Abdullah will host Bush at his horse farm on the outskirts of Riyadh.
    The White House says the two day visit will mostly pay tribute to 75 years of formal ties between Washington and the kingdom.
    However, the two leaders will also try to mend relations that deteriorated in the aftermath of the September 11 attacks in 2001 and the US-led invasion of Iraq in 2003.
    Arms deal 
    The United States ended more than a decade of military operations in Saudi Arabia in 2003 amid resentment in the kingdom over the American military presence.
    Without providing further details, the White House said the two allies will also conclude an agreement for broader co-operation between the Saudi interior ministry and the US government.
    Saudi Arabia has agreed to join two global initiatives - to combat nuclear terrorism and to stop the spread of weapons of mass destruction, the White House said.
    King Abdullah will likely be looking for reassurances on Bush's commitment to push a $1.4 billion arms sale through the US Congress, which is led by the political opposition. 
    Democrats have threatened to block the deal in order to put pressure on Saudi Arabia to increase oil output.
    Opec members have blamed high oil prices on speculators, saying it is not due to shortage of supply.
    Before leaving Saudi Arabia for Egypt, Bush is also likely to press the Saudis to do more to support the US-brokered Israeli-Palestinian peace talks.

    SOURCE: Agencies


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