Schröder said on Monday in Kuwait City he was very concerned about oil price hikes and he hoped instead of curbing extraction oil producers would even expand it. His comments came after talks with Kuwaiti Prime Minister Sheikh Sabah al-Ahmad al-Sabah, whose land currently holds the rotating OPEC presidency.

Oil-producing countries must also take a look at the global economic impact of the oil price, Schröder said, adding that he had started an initiative at the last G8 summit to quell price speculation. "That will be one of our main tasks in the time to come," he said.

Al-Sabah said it was not in the interests of the oil-producing countries for the price to rise further. Kuwait would work to keep the prices under control, he added.

Oil prices steadied over $51 a barrel on the New York Mercantile Exchange in the wake of al-Sabah's comments.

The two leaders also agreed to establish a commission tasked with expanding economic cooperation between their countries. Meanwhile, engineering giant Siemens signed a €70 million ($93 million) contract to transformers to Kuwait.

Schröder also officially launched DW's Arabic TV service while in the Kuwaiti capital.

Plugging diplomacy over Iran

Earlier in the day in the Saudi capital Riyadh, Schröder plugged diplomatic efforts on the part of Germany, France and Britain to resolve the conflict over Iran's nuclear program. He said it was "all of our task" to prevent the spread of weapons of mass destruction. He said the negotiations were "promising."

Speaking at a German-Saudi economic forum in Riyadh, the chancellor urged his audience to consider Germany -- and especially the country's eastern regions -- as a place to invest their money.

"The German economy is definitely waiting for you to become active there as our friends and partners," Schröder said.

At the same time, he also expressed his belief that "enormous possibilities" exist for German business in Saudi Arabia. Schröder said Germany had first class engineers and architects that could help to improve Saudi infrastructure. He added that German companies working abroad did a lot to train young local employees.

While Schröder's comments were focused on future economic cooperation, German businesspeople were already able to sign treaties totaling €18 million ($23.8 million) for telecommunications and consulting services as well as the expansion of an airport. Much larger deals are expected to be finalized when Schröder visits the United Arab Emirates in the coming days.

The Saudis and other Arab governments have expressed interest in German defense industry products including armored vehicles, helicopters and submarines. Germany has not delivered notable amounts of military goods to Saudi Arabia since 1991.

Addressing human rights

Berlin is often accused of putting business ahead of encouraging political reforms in the region. Human rights groups including Amnesty International have urged Schröder talk to his hosts about contentious civil rights issues while in the Islamic kingdom.

"The chancellor can't simply focus on economic relations with Saudi Arabia," Amnesty's Middle East expert Regina Spöttl told the DPA news agency. "The chancellor should stand up for the abolishment of the death penalty."

The German foreign ministry pointed out that Schröder would be addressing the situation of political prisoners and lacking rights for women in Saudi Arabia.

After talks with Saudi Crown Prince Abdullah, Schröder praised the "cautious democratization" process under way in the country but said it did "not go far enough."

Voters in eastern and southwestern Saudi Arabia will go to the polls in municipal elections on Thursday. While half of all council representatives will be elected, the other half will still be appointed by the authorities. Women cannot vote nor run for election.

After further talks in Kuwait on Tuesday, Schröder will continue onward to Qatar, Bahrain, Yemen, Oman and the United Arab Emirates (UAE). It is his second visit to the region in the space of 18 months.