March 22 (Bloomberg) -- Vice President Dick Cheney and King Abdullah of Saudi Arabia agreed there are structural problems in the energy markets and discussed ways of stabilizing them in the short term, a senior U.S. administration official said.

The official, speaking to reporters traveling with Cheney, declined to provide details on what specific agreements were reached today, saying the meetings were confidential. Cheney also met with Saudi Oil Minister Ali al-Naimi for a half hour while visiting the king's Arabian horse farm outside Riyadh.

Cheney's meetings in Saudi Arabia followed similar ones by President George W. Bush two months ago during his visit to the country. On that trip, Bush urged OPEC to increase oil production. At that time, al-Naimi insisted that the kingdom would boost production only if the market justified it.

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 cost of gasoline and other goods amid concerns the U.S. economy is on the verge of a recession.

In their discussions today, the two leaders also focused on longer-term fixes for the energy market. Cheney said this week that tight capacity, the declining value of the dollar and increased global demand are all pressuring the energy markets, and long-term solutions are needed to address those issues.

In their meetings, Cheney and Abdullah also discussed Iran's nuclear ambitions, and the vice president pressed Saudi Arabia to boost diplomatic ties with Iraq and increase its business investment in both Iraq and Afghanistan.

Cheney earlier this week visited Iraq, Oman and Afghanistan. He leaves Saudi Arabia today and heads to Israel, and then Turkey.

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

Last Updated: March 22, 2008 05:41 EDT