March 21 (Bloomberg) -- Vice President Dick Cheney will discuss ``problems'' in energy markets in two days of talks with King Abdullah of Saudi Arabia that will also focus on security concerns, a Cheney aide said.

``They will review a broad agenda of diplomatic and security issues, as well as where we are now in the global energy market,'' National Security Adviser John Hannah told reporters on the flight from Afghanistan to Saudi Arabia today.

``They will have ample discussions about both the problems that exist in the market, how they lend themselves to various kinds of solutions, and I'm sure they will talk about a cooperative way forward to try and stabilize this market,'' Hannah said.

A senior administration official said Cheney's talks will focus on longer-range solutions to tight oil capacity. He may be less aggressive than his boss, President George W. Bush, was when he pressed the same issue in Saudi Arabia two months ago. While Bush came to Saudi Arabia and asked OPEC to increase oil production, Cheney, during his 10-day Middle East trip, has seemed less intent on pushing down prices.

``High oil prices reflect primarily the reality of the marketplace,'' Cheney said in Iraq at the start of his current Middle East tour. ``There's just not a lot of excess capacity worldwide.''

Price Surge

The price of oil reached a high of $111 a barrel two weeks ago, and has surged 77 percent during the past year, pushing up the price of gasoline and other goods amid concerns the U.S. economy is on the verge of a recession.

Bush said before Cheney's trip that he hoped Abdullah would ``listen very carefully'' to Cheney's concerns about oil, and White House spokeswoman Dana Perino said the hope was to ``see an increase in production.''

Yet a senior administration official, who briefed reporters traveling with Cheney, said the vice president may not seek anything more than a thorough discussion about the current situation in the global energy markets.

Cheney said during his current Middle East tour that his view of the current energy situation is one in which there is a ``dramatic increase'' in demand, as well as pressures from the declining value of the dollar. Bush, announcing Cheney's trip, said high crude oil prices are ``damaging'' the markets of Saudi Arabia's biggest customers.

OPEC Production

Still, oil producing countries in the Middle East have not seemed convinced by Bush's view that more production is needed. Twice since Bush made his appeal in January for more oil during his Saudi visit, the Organization of Petroleum Exporting Countries has decided not to change its production targets. OPEC supplies more than 40 percent of the world's oil.

Cheney will hold two days of meetings with Abdullah, and his itinerary includes a visit to the King's horse farm outside Riyadh. Other issues on their agenda include concerns about the nuclear threat posed by Iran to the region, and military and political progress in Iraq. Cheney, during his visit to Baghdad on March 17, urged Saudi Arabia and other Arab neighbors to open full diplomatic ties with Iraq as a way of countering Iranian influence.

``Our Arab friends would do well to send an ambassador to Iraq,'' he said. Saudi Arabia has not yet formally appointed an ambassador to the country.

Cheney has made several visits to Saudi Arabia as vice president, and has ties dating back to his tenure as defense secretary during the Persian Gulf War in 1991.

To contact the reporter on this story: Holly Rosenkrantz in Riyadh at hrosenkrantz@bloomberg.net.

Last Updated: March 21, 2008 06:17 EDT