Bush, Saudi King Discuss Rising Oil Prices

President Bush spends a second day in Saudi Arabia while on an eight-day trip to the Middle East. He says he spoke with Saudi King Abdullah, whose nation holds the world's largest oil reserves, about rising oil prices. They recently topped $100 a barrel.

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RENEE MONTAGNE, host:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

President Bush is in Saudi Arabia today on his tour of the Middle East. And Secretary of State Condoleezza Rice is in Baghdad. She left Saudi Arabia earlier this morning on an unannounced trip to Iraq to meet with Prime Minister Nouri al-Maliki and others there.

NPR's Michele Kelemen joins us from the Saudi capital Riyadh.

Good morning.

MICHELE KELEMEN: Good morning, Renee.

MONTAGNE: And Michele, I understand that Secretary Rice there over in Iraq is hoping to give some momentum to the process of political reconciliation, which until now has been pretty slow going?

KELEMEN: That's right. But on Saturday, the Iraqi Parliament passed this bill they call the deBaathification law. It would mean that thousands of people who were affiliated with Saddam Hussein's Baath Party can return to work in government jobs and get pensions. And when they passed it, President Bush called it an important step toward political reconciliation.

MONTAGNE: Although just briefly, there is some question about whether it will actually do the job of bringing more Baathist back into the government.

KELEMEN: Well, I mean, this is the question but this is, you know, early stages of this and, of course, this was one of the key benchmarks that the U.S. was looking for, this - the others being the oil law and other things.

MONTAGNE: Now, the president stayed in Saudi Arabia today. He met with the Saudi King Abdullah, and one of the things he talked about, President Bush, was high oil prices.

President GEORGE W. BUSH: I talked to the ambassador, and will again talk to his majesty tonight about the fact that oil prices are very high, which is tough on our economy. And that I would hope, as OPEC considers different production levels, that they understand that if their - one of their biggest consumers' economy suffers, it will mean less purchases, less oil and gas sold. And so, now we've got a lot of things to talk about, but I want to assure you it's from the spirit of friendship.

MONTAGNE: President Bush in Saudi Arabia, which, of course, is home to the world's largest oil reserves.

KELEMEN: It's right. And this is a big ally. But, you know, most of these talks have been focusing on the strategic issues on Iraq and Iran and other things. But the reporters have been pressing the White House, saying, you know, is he talking about oil. Today, he said he was bringing this up in private with King Abdullah.

The other interesting thing is that the president has been getting lots of questions in the Gulf region about the U.S. economy. And he's had to try to reassure people here that the - he thinks the fundamentals are good. You know, there's a lot of concern here about the dropping dollar, for instance. So economic issues are surely big on the plate.

MONTAGNE: And Saudi Arabia got something big out of President Bush's trip. He delivered a major weapons deal to that country. There has been some criticisms in Congress that Saudi hasn't done - that Saudi Arabia hasn't done enough to fight terrorism and doesn't deserve this deal. What about that?

KELEMEN: The Bush administration has notified Congress it was giving Congress 30 days to object to this. And really what they announced is just part of a multibillion-dollar package. This part of it is $120-million aid package.

MONTAGNE: Is this sale of arms to Saudi Arabia part of President Bush's strategy to sideline or even to ostracize Iran?

KELEMEN: It is part of it. You know, when the Bush administration toppled Saddam Hussein's rule in Iraq that it did knock out one of the big counterbalances - the security counterbalances in the region to Iran. So this arms deal that was announced last year was part of that effort to remind this region that the U.S. is committed to its security. And the region does see Iran as a threat, though, a little nervous about the provocative rhetoric that Mr. Bush has been bringing on this trip.

MONTAGNE: NPR's Michele Kelemen in Saudi Arabia with President Bush.

Thanks for joining us.

KELEMEN: My pleasure.

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