[whmatthews]

http://www.independent.co.uk/news/world ... 47830.html

Saudi King: 'We will pump more oil'

By Anne Penketh in Jeddah
Monday, 16 June 2008

Saudi Arabia will raise oil production to record levels within weeks in an attempt to avert an escalation of social and political unrest around the world. King Abdullah signalled the commitment to the UN secretary general, Ban Ki-moon, at the weekend after the impact of skyrocketing oil prices on food sparked protests and riots from Spain to South Korea.


Next month, the Saudis will be pumping an extra half-a-million barrels of oil a day compared to last month, bringing total Saudi production to 9.7 million barrels a day, their highest ever level. But the world's biggest oil exporters are coupling the increase with an appeal to western Europe to cut fuel taxes to lower the price of petrol to consumers.

Saudi Arabia, which has called an emergency meeting of oil producers and consumers in the port city Jeddah next Sunday, says the energy crisis has not been caused purely by market pressures but by a speculative bubble. Saudi Arabia and Opec believe there are no shortages to justify the sudden surge in prices.

Mr Ban held talks with King Abdullah at the royal palace in Jeddah on Saturday evening for more than an hour which were dominated by the energy crisis. The Saudi monarch shared his concern that the oil price was "abnormally high" although he blamed "national policies" in the West, Mr Ban told The Independent yesterday. "He was also suggesting that consumers should play their own role," Mr Ban added.

Just before his departure for London yesterday, he had a telephone conversation with the Saudi oil minister, Ali al-Naimi, who told him that Saudi Arabia had raised production this month by 300,000 barrels per day at the request of consumers, and next month would raise output by a further 200,000 barrels per day. Mr Ban said: "He told me they will respond positively whenever there is a request for an increase in production. So there will be no shortage of oil."

Mr Naimi said Saudi Arabia was responding to requests from between 30 and 60 consumer countries. Finance ministers from the Group of Eight nations meeting in Tokyo yesterday added to the chorus urging Saudi Arabia to increase production.

The UN chief said he had asked the Saudi minister whether the additional output would be enough to help stabilise the market, adding: "He said the consumers and others should play their own role."

Mr Ban, who flew to Saudi Arabia after a meeting in London with Gordon Brown at Downing Street on Friday as Britain was in the grip of a protest by lorry drivers, conveyed the concerns of world leaders about the impending oil crisis. The South Korean secretary general said: "Unless we properly manage these issues, this may create a cascade of all other challenges and prices, affecting not only social and economic issues but also creating political instability."

But it appears the Saudis are just as worried that record prices – on Friday oil was being priced at just under $135 a barrel – could dampen growth in the industrialised West and lower demand, which would in turn hurt the kingdom.

[JDUB]

i wish america would say the same thing