Transcripts

The Mideast Threatens To Shake The G-8 Agenda

PAUL KANGAS: President Bush is in St. Petersburg, Russia, tonight, meeting with President Vladimir Putin ahead of this weekend`s G-8 summit. Escalating violence in the Middle East may put some of the major G-8 agenda items on the back burner. Darren Gersh reports from Washington.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Russian President Vladimir Putin meant for energy security to be the main topic of discussion at this weekend`s G-8 summit with President Bush and other world leaders. If the fighting in Lebanon doesn`t crowd out the rest of the agenda, analysts say there are useful steps the G-8 could take to calm oil markets.

DAVID SANDALOW: First, promoting some open investment regimes, second, promoting coordination on strategic petroleum reserves and other mechanisms to prevent supply disruption, third, promote clean energy and, fourth, broaden the dialogue.

GERSH: The leaders of China and India will attend the G-8 meetings in St. Petersburg on Monday, but analysts say a real discussion of energy security requires deeper engagement with emerging economic giants and key oil producers like Saudi Arabia. For its part, the United States wants to address broader security issues relating to Iran`s nuclear ambitions. Fear of a confrontation with Iran is a key reason oil hovers near $80 a barrel.

ROBERT GALLUCCI: If the United States and Russia are not on the same sheet of music with respect to carrots and sticks with the Iranians, then our ability to induce the Iranians to adopt a position we want and give up this uranium enrichment program is diminished substantially.

GERSH: The Russian president has his own ideas of what energy security means. He`s reasserted state control over oil and gas production, and now wants more direct access to European energy markets. The Russians would also like respect and greater investment from the west.

LEON ARON, AMERICAN ENTERPRISE INSTITUTE: Their sense is that, look, we`re already second to Saudi Arabia. We`ve done wonderfully since `99. What more do you want from us? Why don`t we get pats on the back?" Well, they don`t get pats on the back because we want more oil, because the price of oil is very high.

GERSH: Analysts say President Putin pushed energy security to the top of the G-8 agenda, in part to begin taking steps to address the issue, but also to remind his guests of Russia`s role as an energy super power. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.