Bush Assures Saudis on Oil Traffic in Gulf

Vice President George Bush assured Saudi Arabia on Sunday that the United States is “irrevocably committed” to maintaining the free flow of Middle East oil exports out of the vital Persian Gulf.

Bush, who is on a 10-day tour of the Middle East, also said that the Reagan Administration is prepared to fight in Congress to obtain approval for a $354-million package of missiles for the Saudis.

Speaking to a group of American businessmen in the Saudi capital, Bush asserted that he was not here on a “price-fixing mission” to prop up the world price of oil but to talk about the problem of the oil price “free fall.”

“I’m in a listening mode when it comes to the intentions of these major producing countries,” Bush said.

“Interest in the United States is bound to be in cheap energy prices if we possibly can,” he said, “but . . . there is some point in which the national security interests say we must have a strong, viable domestic (oil-producing) industry.”

The vice president caused a considerable uproar in the petroleum marketplace last week when he said he would be pleading with the Saudis for market stability.

Saudi Arabia’s decision last fall to sharply increase its production is widely credited with helping to cause the price of oil to fall sharply worldwide.

The price slide has caused economic dislocations in Bush’s home state of Texas and elsewhere in the Southwest, as well as causing concern to U.S. oil companies.

Bush’s remarks also alarmed the Saudis, who are understood to have demanded a clarification from the White House before Bush arrived.

Perhaps as a result, Bush was given a low-key welcome by Prince Salman ibn Abdulaziz, the relatively low-ranking governor of Riyadh province. A luncheon Sunday in Bush’s honor--held in a desert tent--was presented by Prince Bandar ibn Sultan, the Saudi ambassador to Washington. King Fahd and Crown Prince Abdullah met Bush later in the day.

Bush had a chance to talk about the oil problem Saturday night at a small dinner party attended by Sheik Ahmed Zaki Yamani, the Saudi oil minister; Finance Minister Mohammed Aba Khayl, and the minister of planning, Sheik Hisam Nazer. All the Saudi officials speak fluent English, permitting a free-ranging discussion.

“The dinner cleared the air about oil,” said one Bush aide, who did not indicate if the Saudis offered any proposals for stabilizing prices.

In addition to the oil question, Bush indicated that security concerns would figure prominently in his talks with Saudi leaders, who have been alarmed over Iran’s recent successes against Iraq in the 5 1/2-year-old Persian Gulf War.

“The great danger now is that (the war) will spread beyond its current boundaries,” Bush said, “. . . that there might be an attempt to close the Strait of Hormuz (at the mouth of the Persian Gulf) or that Iran might break through Iraqi lines and attack neighboring countries, something it has threatened to do.”

But, he said, the United States “is fundamentally, irrevocably committed to maintaining the free flow of oil through the gulf.”

Bush said that the decision to deploy the U.S. 6th Fleet in the Gulf of Sidra, and the resulting clashes with Col. Moammar Kadafi’s Libyan regime, underscored America’s resolve to keep navigation lanes open.

At the opening of the new U.S. Embassy here Saturday, Bush said that the Administration “remains committed” to providing Saudi Arabia with weapons for “defense and stability,” a sentiment he underscored again Sunday.