U.S. arms for Saudi oil?

HERALD SUN CAPTION: Arabian knights: President Bush's car is escorted by riders as he arrives at the guest palace in Riyadh. Picture: AFP

UPDATED BELOW

The Herald Sun in Australia reports an arms deal with Saudi Arabia "to counter Iran's growing military clout." Snip:

Just hours after [Bush's] arrival for the first time in Riyadh, the US Administration said it had notified Congress of its intention to offer the Saudis a controversial package of advanced weaponry as part of a multi-billion-dollar deal with Gulf Arab allies.

Precision-guided bomb kits, or "smart bombs", would give the country's armed forces highly accurate targeting abilities.

[Keep reading... more after the jump.]

But the deal has raised concerns in Israel and among some of its allies about the military balance of power in the region.

The sale appeared to be part of Mr Bush's effort to persuade Saudi Arabia, one of the Arab world's most influential states, to help contain Iran and offset what he has branded a danger to world security.

USAToday headline announces, "Saudis rebuff Bush's call for increases in oil production." Bush had requested that OPEC "increase the supply of oil in hopes of lowering gas prices and avoiding a U.S. recession." What did the Saudis say?

...Saudi Arabia's oil minister said such action would be premature.

"We will raise production when the market justifies it," says Ali Al-Naimi, minister of petroleum and mineral resources for the world's largest oil-producing nation.

Bloomberg News added:

Saudi Arabia has held back about 2 million barrels a day of oil that could be supplied to the market if needed, Naimi said.

And so the horse trading begins. Was the Strait of Hormuz kerfuffle with Iran -- which turned out to be a hoax -- fronted as justification for a U.S.-Saudi arms deal to ultimately cajole more oil out of OPEC? I dunno but all of this smells...greasy.

UPDATE: Via Iran Nuclear Watch:

Yesterday, the Bush administration initiated the formal 30-day notification process for the proposed sale of 900 Joint Direct Attack Munitions (JDAMs) to Saudi Arabia. In response, my colleagues Travis Sharp and Katie Mounts released a report they have been working on for some time arguing that the administration continues to use deadly technologies as the flawed currency of friendship with foreign nations.

The report concludes that instead of working with countries to improve political freedom, the $20 billion sale rewards an oppressive Saudi monarchy whose human rights record has not met expectations of improvement following the accession to the throne of King Abdullah in August 2005.

Report available from the Center for Arms Control and Non-proliferation.