US president displeased by growing oil prices

President Bush says high oil prices are "tough on our economy." And he says he's talking about that problem with King Abdullah as he continues a visit to Saudi Arabia.

Photo: US president displeased by growing oil prices

Bush says he hopes OPEC understands that when consumers have money problems they cut back on spending, meaning less oil or gas is purchased, the AP reports.

Saudi Arabia is the world's leading petroleum exporter and petroleum exports fuel the Saudi economy. Oil accounts for more than 90 percent of exports and nearly 75 percent of government revenues, facilitating the creation of a welfare state, which the government has found difficult to fund during periods of low oil prices.

Human rights groups such as Amnesty International and Human Rights Watch have repeatedly expressed concern about the state of human rights in Saudi Arabia, although these concerns have been dismissed by the Saudi government.

The combination of relatively high oil prices and exports led to a revenues windfall for Saudi Arabia during 2004 and early 2005. For 2004 as a whole, Saudi Arabia earned about $116 billion in net oil export revenues, up 35 percent from 2003 revenue levels.

Saudi net oil export revenues are forecast to increase in 2005 and 2006, to $150 billion and $154 billion, respectively, mainly due to higher oil prices. Increased oil prices and consequent revenues since the price collapse of 1998 have significantly improved Saudi Arabia's economic situation, with real GDP growth of 5.2 percent in 2004, and forecasts of 5.7% and 4.8% growth for 2005 and 2006, respectively.