Saudi-Bush Oil Scheme Denied

Saudi Arabia has denied accusations in Bob Woodward's latest book that it had reached an agreement with the White House to increase oil production closer to the Nov. 2 election, thus driving down gasoline prices.

"The allegation that the kingdom is manipulating the price of oil for political purposes or to affect elections is erroneous and has no basis in fact," said a statement issued in Riyadh by top Saudi foreign policy adviser Adel al-Jubeir.

"Over the past 30 years, the kingdom has sought to ensure adequate supplies of crude at moderate price levels that are acceptable to both producers and consumers. This policy is consistent, and independent of who is in power within consuming countries, including the U.S.," al-Jubeir added.

While al-Jubeir did not mention Woodward's "Plan of Attack," he was clearly referring to the book, which was released earlier this month.

The alleged deal on gas prices was first reported Sunday night on CBS's "60 Minutes." Woodward told CBS' Mike Wallace that Prince Bandar bin Sultan, the Saudi ambassador to Washington, has promised Mr. Bush that Saudi Arabia will lower oil prices before the election to ensure the U.S. economy is strong in November.

"That's the Saudi pledge," Woodward said. "Certainly over the summer or as we get closer to the election they could increase production several million barrels a day and the price would drop significantly."

[CBS News and Simon & Schuster, the publisher of Woodward's book, are both owned by Viacom.]

Asked if he could describe conversations between the White House and Bandar about lowering oil prices before the election, White House spokesman Scott McClellan said only that Bandar had visited the White House on April 1 and pledged to protect the world economy from oil shocks.

Bandar said Saudi Arabia would take actions to ensure that crude oil prices remain between $22 and $28 a barrel, ideally an average of $25, McClellan said.

"We've made our views very clear that prices should be determined by market forces, and that we are always in close contact with producers around the world on these issues to make sure that actions aren't taken that harm our consumers or harm our economy," McClellan said.

Bandar said there was no plan to increase oil production.

In his statement, al-Jubeir said it was "natural for any administration to discuss the status of oil markets when prices spike.

"If the spikes are a function of shortages of supply, we rectify it with the other producers. If they are a function of other factors, we try to deal with them accordingly," he said.

The Organization of Petroleum Exporting Countries, of which Saudi Arabia is a leading member, had announced at the end of March that it would cut its crude oil production target by 4 percent. That decision was expected to push prices higher — and U.S. motorists already have been paying the highest prices in recent years for gasoline.

Democratic presidential candidate John Kerry referred to the allegations on oil production on Monday.

"If it is true that gas supplies and prices in America are tied to the American election, tied to a secret White House deal, that is outrageous and unacceptable to the American people," Kerry said.

Stressing his support for Israel, Kerry vowed to end a "sweetheart relationship with a bunch of Arab countries that still allows money to move to Hamas, Hezballah and the Al Aqsa Brigade."

The Al Aqsa Martyrs Brigade, a violent offshoot of Yasser Arafat's mainstream Fatah, has been blamed for suicide bombings and other attacks in Israel. It was formed after the onset of hostilities in 2000.

While Kerry pointed the finger of blame at a list of Arab countries he didn't name, spokesman David Wade said he was referring primarily to Saudi Arabia and accused Mr. Bush of walking away from Mideast peace efforts.

Kerry said he had his own plan for lowering gas prices. "And you know what the Number One priority of that plan was? Put pressure on the Saudis to increase production and lower the prices to America," he said.

The Bush campaign has accused Kerry of supporting higher gas taxes, including a boost of 50 cents per gallon. Kerry voted in 1993 for an overall budget bill that included a 4.3-cent-per-gallon tax increase. Although he mentioned in a 1994 interview the idea of an additional tax of 50 cents per gallon, Kerry never offered legislation and has since rejected the idea.