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CNN Live At Daybreak

Saudi Crown Prince's Promise Not to Use Oil as Weapon Just What Wall Street Wants to Hear

Aired April 26, 2002 - 05:16   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Saudi Arabia is considered the closest ally of Washington in the Arab world. It's a major supplier of oil to the United States. I don't need to tell you that.

And as CNN's Kitty Pilgrim reports, the Saudi crown prince's promise not to use oil as a weapon is just what Wall Street wants to hear.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Saudi Crown Prince Abdullah delivered his message from the oil capital of the United States, Texas, saying the country with the largest oil reserves in the world will work to maintain stable and fair oil prices. The prince's foreign policy adviser directly addressed the Iraqi call to other Arab nations to cut back supply.

ADEL AL-JUBEIR, SAUDI FOREIGN POLICY ADVISER: Oil is not a weapon. Oil is not to be used for political purposes. We have a responsibility to the global economic system.

PILGRIM: The Saudis did not always see things this way. In the 1970s, the Saudis joined the Arab oil embargo to drive up prices. World markets were hurt and the Saudis also lost market share at that time. It's not a strategy they are likely to engage in again.

Many think the Iraqis, by calling for an Arab embargo on oil, had a twofold strategy. One was to put pressure on the United States. The other to embarrass the Saudis and become the hero of the common man in the Arab street.

RACHEL BRONSON, COUNCIL ON FOREIGN RELATIONS: The boycott that the Iraqis did put through directly challenges the Saudis because they are seen publicly as making up the supply, the Iraqi supply. It's something very difficult for them to do.

PILGRIM: Saudi Arabia, by being the voice of moderation on oil and a strategic ally of the United States, walks a political tightrope with its own population, nuances felt Thursday on the New York trading floor.

SCOTT HESS, G&H COMMODITIES: There's been a lot of nervous trading today. All eyes are basically on Texas and watching how the proceedings are going down.

PILGRIM: The meeting, at least from the perspective of market stability, seemed satisfactory. Texas oil met Saudi oil and seemed to be in agreement on at least one thing.

Kitty Pilgrim, CNN Financial News, New York.

(END VIDEOTAPE)

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