Tag Archives: Saudi Arabia

Xi of Arabia and the petroyuan drive, by Pepe Escobar

Posted on December 18, 2022 | Leave a comment

Bit by bit the dollar is losing its reserve currency status. If the Middle East and China do their oil business in currencies other than the dollar, particularly the yuan, it will hasten the process. From Pepe Escobar at thecradle.co:

Xi Jinping has made an offer difficult for the Arabian Peninsula to ignore: China will be guaranteed buyers of your oil and gas, but we will pay in yuan.

 
https://media.thecradle.co/wp-content/uploads/2022/12/Chinas-Xi-and-the-GCC-countries.jpg

Photo Credit: The Cradle

 

It would be so tempting to qualify Chinese President Xi Jinping landing in Riyadh a week ago, welcomed with royal pomp and circumstance, as Xi of Arabia proclaiming the dawn of the petroyuan era.

But it’s more complicated than that. As much as the seismic shift implied by the petroyuan move applies, Chinese diplomacy is way too sophisticated to engage in direct confrontation, especially with a wounded, ferocious Empire. So there’s way more going here than meets the (Eurasian) eye.

Xi of Arabia’s announcement was a prodigy of finesse: it was packaged as the internationalization of the yuan. From now on, Xi said, China will use the yuan for oil trade, through the Shanghai Petroleum and National Gas Exchange, and invited the Persian Gulf monarchies to get on board. Nearly 80 percent of trade in the global oil market continues to be priced in US dollars.

Ostensibly, Xi of Arabia, and his large Chinese delegation of officials and business leaders, met with the leaders of the Gulf Cooperation Council (GCC) to promote increased trade. Beijing promised to “import crude oil in a consistent manner and in large quantities from the GCC.” And the same goes for natural gas.

China has been the largest importer of crude on the planet for five years now – half of it from the Arabian peninsula, and more than a quarter from Saudi Arabia. So it’s no wonder that the prelude for Xi of Arabia’s lavish welcome in Riyadh was a special op-ed expanding the trading scope, and praising increased strategic/commercial partnerships across the GCC, complete with “5G communications, new energy, space and digital economy.”

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Posted in Banking, Business, Currencies, Energy, Eurasian Axis, Geopolitics, Governments, Politics

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The Petrodollar’s Long Goodbye, by Vijay Prashad

Posted on December 17, 2022 | Leave a comment

The dollar’s reserve currency status has allowed the U.S. the privilege of paying for goods and service with debt instruments it can create at will. The rest of the world is tired of this unfair arrangement. From Vijay Prashad at consortiumnews.com:

As part of their concern about “currency power,” many countries in the Global South are eager to develop non-dollar trade and investment systems, writes Vijay Prashad.

Xi Jinping and King Salman bin Abdulaziz Al Saud, Dec. 9. (CCTV/Wikimedia Commons)

On Dec. 9, China’s President Xi Jinping met with the leaders of the Gulf Cooperation Council (GCC) in Riyadh, Saudi Arabia, to discuss deepening ties between the Gulf countries and China.

At the top of the agenda was increased trade between China and the GCC, with the former pledging to “import crude oil in a consistent manner and in large quantities from the GCC” as well to increase imports of natural gas.

In 1993, China became a net importer of oil, surpassing the United States as the largest importer of crude oil by 2017. Half of that oil comes from the Arabian Peninsula, and more than a quarter of Saudi Arabia’s oil exports go to China. Despite being a major importer of oil, China has reduced its carbon emissions.

A few days before he arrived in Riyadh, Xi published an article in al-Riyadh that announced greater strategic and commercial partnerships with the region, including “cooperation in high-tech sectors including 5G communications, new energy, space, and digital economy.”

Saudi Arabia and China signed commercial deals worth $30 billion, including in areas that would strengthen the Belt and Road Initiative (BRI). Xi’s visit to Riyadh is one of his few overseas trips since the Covid-19 pandemic.

His first was to Central Asia for the summit of the Shanghai Cooperation Organisation (SCO) in September, where the nine member states (which represent 40 percent of the world’s population) agreed to increase trade with each other using their local currencies.

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Biden Kills Senate Resolution To End Yemen Genocide, by Caitlin Johnstone

Posted on December 14, 2022 | Leave a comment

It is horrific that the killing continues in Yemen, a poor backward country pitted against wealthy Saudi Arabia and its allies, including the U.S. From Caitlin Johnstone at caitlinjohnstone.com:

Bernie Sanders has withdrawn his bill to end US support for the Saudi war on Yemen following reports that the Biden administration was working to tank the resolution, with White House aids reportedly saying they’d recommend the president veto it.

Antiwar’s Dave DeCamp reports:

Sen. Bernie Sanders (I-VT) on Tuesday night withdrew his request to vote on the Yemen War Powers Resolution that would end US support for the Saudi-led war and blockade on Yemen, citing White House opposition to the bill.

 

Sanders said on the Senate floor that he was informed ahead of the scheduled vote of the administration’s opposition to the legislation, meaning President Biden would veto the resolution. The Intercept reported earlier in the day that The White House was pressuring senators to vote against the bill, and Democrats came out in opposition to Sanders’ resolution earlier on Tuesday, including Sen. Alex Padilla (D-CA).

 

Sanders’ justification for not holding the vote was that the administration claimed it would work with Congress on ending the war in Yemen. He said the White House wanted to “work with us on crafting language that would be mutually acceptable” and insisted if that didn’t happen, he would resume his efforts to end the war through a resolution.

 

But even if the White House really wants to engage with Congress on the issue, or if Sanders chooses to reintroduce the resolution, the plan will take time, which Yemenis don’t have. There has been a cessation in violence in Yemen, with no Saudi airstrikes since March, but there has been a recent uptick in fighting on the ground.

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Xi Jinping’s Visit to Saudi Arabia and the overthrow of Atlanticism, by Matthew Ehret

Posted on December 11, 2022 | Leave a comment

Nobody has ever accused Saudi Arabia of having anything but a strictly “Saudi Arabia First” foreign policy. It looks China is offering a better deal than the U.S. From Matthew Ehret at thecradle.co:

The historic China-Arab Summit currently underway in Riyadh symbolizes the emerging Eurasianism in the Persian Gulf.

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Photo Credit: The Cradle

As Atlanticists continue their commitment to a future shaped by energy scarcity, food scarcity, and war with their nuclear-capable neighbors, most states in the Persian Gulf that have long been trusted allies of the west have quickly come to realize that their interests are best assured by cooperating with Eurasian states like China and Russia who don’t think in those zero-sum terms.

With Chinese President Xi Jinping’s long-awaited three-day visit to Saudi Arabia, a powerful shift by the Persian Gulf’s most strategic Arab state toward the multipolar alliance is being consolidated. Depending on which side of the ideological fence you sit on, this consolidation is being viewed closely with great hope or rage.

Xi’s visit stands in stark contrast to US President Joe Biden’s underwhelming ‘fist bump’ meeting this summer, which saw the self-professed leader of the free world falling asleep at a conference table and demanding more Saudi oil production while offering nothing durable in return.

In contrast, Xi’s arrival was greeted by a multi-cannon salute and Saudi jets painting the red and yellow colors of China’s flag in the skies over Riyadh. Beijing’s delegation of political and business elites, in the following days, will continue to meet with Saudi counterparts to strike long-term strategic deals in cultural, economic and scientific domains.

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Biden Goes Begging For Saudi Barrels, by Jim Bovard

Posted on November 9, 2022 | Leave a comment

Joe Biden went to the Middle East to kowtow to the Saudis and he didn’t even come home with a T-shirt to show for it. From Jim Bovard at libertarianinstitute.org:

Why don’t you talk about something that matters?” President Biden replied to a journalist asking about why he fist-bumped Saudi dictator Mohammed bin Salman (MBS) during his “begging for barrels” trip to the Middle East in July. Biden hoped the Saudis would rescue his presidency by pumping more oil in order to lower American gasoline prices and prevent the demolition of the Democratic Party in the mid-term elections.

On the eve of Biden’s “begging for barrels” tour, federal data confirmed the wreckage of his economic policies. The inflation rate soared to 9.1%, much worse than forecast. Biden has decimated the purchasing power of the dollar as real wages for Americans declined for the 15th straight month. Biden traveled as a desperate man whose own political party is facing a horrendous pummeling in November.

Prior to Biden’s Saudi trip, a top White House official justified forcing Americans to continue paying high gas prices to prop up Biden’s plan for “the liberal World Order.” This was part of the “Putin’s Price Hike” refrain and an attempt to make people feel patriotic when they get skewered at the gas pump. But the PR gesture failed miserably—except perhaps for the coastal elites, who are unaware what their chauffeurs pay to fill the tank.

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OPEC’s Body Blow to Biden, by M.K. Bhadrakumar

Posted on October 11, 2022 | 1 comment

Saudi Arabia and the Gulf States are shifting towards the Eurasian axis. The Russians may throw in some arms deals of their own. From M.K. Bhadrakumar at consortiumnews.com:

M.K. Bhadrakumar says the OPEC+ decision could change the security picture in West Asia more than anything since the 1979 Iranian Revolution.

President Joe Biden and Saudi Crown Prince Mohammed bin Salman bin Abdulaziz bump fists at Al-Salam Palace in Jeddah, on July 15. (Saudi Press Agency, Wikimedia Commons, CC BY 4.0)

The Biden administration is swiftly establishing a narrative that the recent OPEC decision to cut oil production by 2 million tonnes is a geopolitical “aligning” by Saudi Arabia and Russia.

It taps into the Russophobia in the Beltway and deflects attention from the humiliating defeat of President Joe Biden’s personal diplomacy with Saudi Arabia. But it is not without basis, either.

Foreign policy was reputed to be Biden’s forte but is turning out to be his nemesis. An ignominious end is not unlikely; as with former U.S. President Jimmy Carter, West Asia may become the burial ground of his carefully cultivated reputation.

The magnitude of what is unfolding is simply staggering. Biden realizes belatedly that territorial conquests in Ukraine is not the real story but embedded in it is the economic war and within that is the energy war that has been incubating through the past eight-month period following the Western sanctions on Russia.

The paradox is, even if Ukraine President Volodymyr Zelensky wins the war, Biden would still have lost the war unless he wins the energy war and goes on to win the economic war as well.

Russian President Vladimir Putin visualized such an outcome as far back as in 2016 when on the sidelines of the G20 Hangzhou summit, the tantalizing idea of OPEC+ crystallized between him and then Saudi Deputy Crown Prince Mohammed bin Salman.

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Is Saudi Arabia Coming Out of Exile? By Doug Bandow

Posted on October 1, 2022 | Leave a comment

Set aside the fact the MSB almost certainly ordered the murder of Jamal Khashoggi. Even if he didn’t, he still presides over one of the most totalitarian regimes on the planet. Other world leaders have no problem with that. From Doug Bandow at theamericanconservative.com:

Anyone who was anyone attended the funeral of Queen Elizabeth. Except Saudi Crown Prince Mohammed bin Salman. His frail father was invited. Not known is whether the invitation was exclusive to the king, excluding MBS (as the son is called), or the latter chose to skip the affair.

His peregrinations matter because he has not visited the United Kingdom since before his minions murdered and dismembered journalist Jamal Khashoggi in the Saudi consulate in Istanbul. Despite the best efforts of the Trump administration, which deployed Secretary of State Mike Pompeo as honorary mob consigliere to protect MBS, the latter was driven into diplomatic exile.

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With Sunday the fourth anniversary of Khashoggi’s murder, however, the crown prince is seeking the sort of murderous respectability achieved by other tyrants around the world. According to Associated Press reporter Aya Batrawy:

Saudi Arabia appears to be leaving behind the stream of negative coverage that the killing of Jamal Khashoggi elicited since 2018. The kingdom is once again being enthusiastically welcomed back into polite and powerful society, and it is no longer as frowned upon to seek Saudi investments or accept their favor. Saudi Arabia’s busy week of triumphs included brokering a prisoner swap between Ukraine and Russia, holding a highbrow summit on the sidelines of the U.N. General Assembly, marking the country’s national day with pomp and pageantry, hosting the German chancellor and discussing energy supply with top White House officials. The kingdom is able to draw focus back to Crown Prince Mohammed bin Salman’s ambitious rebranding of Saudi Arabia and his goals to build both the world’s largest sovereign wealth fund and pull the kingdom up from the G-20 to the more exclusive G-7 nations representing the biggest economies.

Perhaps Riyadh’s revival is unsurprising. Even American policymakers who sanctimoniously lecture the world on human rights are famously forgiving of murderous allies bearing gifts. Especially oil from the Saudis. Yet the Kingdom of Saudi Arabia is particularly odious.

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China’s BRI Shapes a Multipolar Future for Saudi Arabia, by Matthew Ehret

Posted on September 3, 2022 | Leave a comment

The Belt and Road Initiative (BRI) may be an important step towards multipolar amity, cooperation, and progress. Or it may be the biggest government-sponsored boondoggle of all time. From Matthew Ehret at strategic-culture.org:

Xi Jinping’s visit to Saudi Arabia is heralding more tectonic changes in the rules of the Great Game in ways that few have begun to realize.

While many people are quick to criticize China for having looked the other way while the atrocious Saudi-led offensive in Yemen has continued to kill hundreds of thousands of civilians since 2015, these same people miss the fact that a higher geopolitical reality is being born which will have a much greater benefit to both the people of Yemen and humanity more generally if it is not sabotaged.

Just to be clear: Saudi Arabia has a lot of blood on her hands.

However, the monarchy is also not merely the unidimensional player which many often assume whose goal is to simply bask forever in oil profits while spreading wahhabite radicalism across the Arab world while subduing any nation who stands in their way.

There is also an emergent robust young generation in Saudi Arabia (half of the 31 million Saudis are under 25) and a renewed embrace of advanced technological progress as a driver for a post-hydrocarbon age. This more healthy dynamic within the Saudi population and governing class was outlined clearly in the Saudi Vision 2030 program of April 2016 and earlier the January 2016 Joint Statement between the People’s Republic of China and the Kingdom of Saudi Arabia which read: “In the process of jointly pursuing the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiative, China is willing to coordinate development strategies with Arab states, put into play each other’s advantages and potentials, promote international production capacity cooperation and enhance cooperation in the fields of infrastructure construction, trade and investment facilitation, nuclear power, space satellite, new energy, agriculture and finance, so as to achieve common progress and development and benefit our two peoples.”

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Sorry Seems to Be the Hardest Word. Biden Aims to Bite the Bullet and Fix Relations With the Saudis, by Martin Jay

Posted on June 28, 2022 | Leave a comment

Do American politicians kowtow harder towards Saudi Arabia or Israel? Most do both. From Martin Jay at strategicculture.org:

Biden needs to now show the Saudis that he was wrong and is sorry as he needs Riyadh more than ever before.

The so-called strategy of Biden to put the Kingdom in line and to alienate MbS has been a disaster and massively backfired. Biden needs to now show the Saudis that he was wrong and is sorry as he needs Riyadh more than ever before.

The Kingdom of Saudi Arabia has always grown accustomed to the game of the seesaw when U.S. presidents take office, as one great friend and supporter is replaced by a ‘frenemy’ who gives Riyadh the cold shoulder. But few could have predicted that this seesaw would swing back within the four-year span of a U.S. presidency, which is what we are witnessing now with the somewhat preposterous stance that Joe Biden is now forced to take with the Saudis.

When Biden came into office he made a song and a dance about not “giving blank cheques” to regional players like the Saudis and it was obvious that he had Saudi’s mercurial Crown Prince ‘MbS’ in his sights, after a catalogue of appalling human rights calamities such as the Yemen war and the ghastly murder of journalist Jamal Khashoggi.

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President Biden Asks the Saudis to Bail Him Out, by Benjamin Zycher

Posted on June 27, 2022 | Leave a comment

Even if you can’t stand Biden, it hurts to see a U.S. president kowtow to the Saudi regime to help alleviate the consequences of his own idiocy. From Benjamin Zycher at realclearenergy.org:

President Biden Asks the Saudis to Bail Him Out

President Biden will attend the Gulf Cooperation Council meeting in Saudi Arabia next month, with the explicit goal of convincing the GCC — that is, the Saudis — to increase production of crude oil as a tool with which reduce gasoline prices in the U.S. From a recent press conference:

Q: And my question on Saudi Arabia: Why not have the President go there and just not meet with the Crown Prince?

MR. KIRBY:  The President is going to Saudi for the GCC — the GCC+3, to be honest.  It’s nine states in the region.  There’s a big agenda there, Kaitlan, on the Gulf Cooperation Council.  It’s counterterrorism.  It’s climate change.  Certainly, it’s — oil production, obviously, is going to be on the agenda.

OPEC production of crude oil and other liquids is about 34-35 million barrels per day (mmbd), of which Saudi output is about 10 mmbd, out of global production of around 100 mmbd. OPEC surplus production capacity is about 3 mmbd, of which the Saudi share is about 1 mmbd.

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