Wednesday, February 1, 2023

Oil, Missiles & Space Program: China Lures Saudi Arabia With ‘Festive Offers’ As US-Saudi Ties Continue To Sink

In the background of a stalemate of sorts in Saudi-US relations following the July visit of President Biden to the Kingdom, it appears that China finds conditions favorable for enhancing its influence in the Gulf region.

Biden wanted Saudi Arabia to increase oil production, which the Saudis did not find in their favor.

Gulf countries, in general, and the Saudi Kingdom, in particular, have been first under British and then American influence primarily because of rich reserves of hydrocarbon reserves.

Tensions over Saudi Arabia’s decision with OPEC+ to cut oil production reached new heights when the White House made the unprecedented move to publicly dispute the Kingdom’s defense, marking a shift in long-standing relations between the two countries.

The Saudi foreign ministry said in a statement that the decision was based on economic considerations and that all members of OPEC+, a group of oil-producing nations, unanimously agreed. However, the Biden administration officials, who saw the move benefiting the Kremlin, sharply pushed back.

“The bottom line is we don’t want to see any nation helping Russia prosecute this war, whether that’s moral support, military support, or economic support. The decision that OPEC+ came out with this week was certainly economic support. And I would argue it also fell into the category of moral and military support,” said John Kirby, a spokesperson for the National Security Council.

He accused the Saudis of trying to “spin or deflect” and, giving insight into some private conversations, said that the Saudis conveyed to US officials in recent weeks that they wanted to reduce oil production and knew it would increase Russian revenues. President Biden also had a clear message on Thursday to the Saudis: “We’re about to talk to you.”

Kirby said that the administration had presented Saudi Arabia with an analysis to argue there was no market basis to cut production targets.

Kirby said other OPEC+ nations have communicated to the US privately that they disagree with the Saudi decision “but felt coerced to support” it. He told those OPEC+ members that expressed their concerns to the US could speak for themselves but that “there was more than one OPEC member” that did.

US Rethinking Relationship With Saudi Arabia? 

Experts said the US presidential administration’s outward criticism of the Saudis was unprecedented.

Earlier, in an interview with CNN, Biden agreed that it was time for the US to rethink its relationship with Saudi Arabia in the wake of the decision by OPEC+.

Kirby added that rethinking the relationship also includes thinking about their leadership of OPEC+, saying that the Saudis “twisted arms” to get the decision they wanted.

The OPEC+’s announcement that it will cut oil production by 2 million barrels per day led to immediate fury among White House and Democratic lawmakers. The decision was seen by many as Saudi Arabia siding with Moscow over the Biden administration.

Biden
US President Joe Biden

The Kingdom, though, voted at the United Nations General Assembly on Wednesday to condemn Moscow’s attempts to annex regions of Ukraine. Kirby conveyed that the vote hasn’t changed minds at the White House.

He added that “the one who benefits here is Vladimir Putin … and that just allows him to continue to profiteer off this.”

Many members of Congress did not appreciate the stand taken by the US, though there was support on the screen.

“Trashing the relationship without an alternative for turning domestic energy production back on and outlining a path forward with our friends and allies in the region is a striking lack of statecraft. Frustration is high, and the Biden administration must lay out a well-reasoned plan which should command significant cross-party support so that Americans aren’t hurt like they were during the two oil embargoes of the 1970s,” he said.

Saudi Arabia’s foreign ministry also said in its statement that US criticism of the OPEC+ decision was “politically motivated” and suggested that the US had asked the Kingdom to wait to cut production until after the midterm elections.

The Biden administration has been under pressure for months to lower gas prices, while Republicans have blamed the president for the country’s inflation woes. The GOP has made the economy and rising prices a central part of their midterm campaign pitch, wrote The Hill on 14 October.

The trip was a source of controversy, given Biden’s remarks on the campaign trail to make Saudi Arabia a “pariah” during the 2020 presidential election following the 2018 murder of Washington Post columnist Jamal Khashoggi. Biden’s visit to the Kingdom also came when gas prices in the US had reached record levels.

“There will be consequences. We believe the decision OPEC+ made last week was a mistake, and it was short-sighted,” White House press secretary Karine Jean-Pierre said on Wednesday. “From the beginning, the president has talked about recalibrating, readjusting our relationship with Saudi Arabia. And now we’re going to get into a process where we’ll review that and have more to share,” he said.

Jean-Pierre also said Biden would work with members of Congress throughout the process and include the House and Senate in discussions.

US-Saudi Relations Strained

Meanwhile, Sen. Bob Menendez (D-N.J.) has called for freezing US cooperation with Saudi Arabia, and Sen. Richard Blumenthal (D-Conn.) and Rep. Ro Khanna (D-Calif.) introduced legislation on Tuesday that would suspend all US arms sales to the Kingdom for one year.

Straining of relations between the long-time allies, the US and the Saudi Kingdom, whetted the appetite of China to fill the vacuum in the Gulf. For quite some time, China had been on the lookout for an opportune time to make her presence felt in the Gulf region in a big way.

Chinese President Xi Jinping received almost royal reception when he arrived in Riyadh for a four-day visit to the Saudi Kingdom, where he was to deliberate with Gulf leaders. Four Royal Saudi Air Force jets escorted his aircraft when it entered Saudi airspace. The warmth and decorum with which Xi was received stands out in contrast to the taciturn and insipid reception given to President Biden.

Saudi Arabia holds the key to the Muslim Gulf region potentates. Under the administration of Crown Prince Muhammad bin Salman (called MBS), Saudi Arabia is taking slow but calculated steps to transform Saudi society from conservatism and orthodoxy to a progressive and open community.

It wants to wriggle out Wahhabism and the orthodoxy and get reconciled to modern life. Perhaps this is the result of the unease that has gripped the youth population of the Kingdom.

As a student in America, MBS came into contact with the richness and liberalism of the modern developed society of the US. In comparing his society with the US, he concluded that Arab society should come out of medieval orthodoxy and conservatism.

Now was the time for him to introduce far-reaching reforms in the traditional Arab community.

But the much-needed modernization program of MBS has won him the ire of the US and European countries just because they would not change their mindset and recognize the urge for diversification which the Arabs, in general, and the Gulf states, in particular, are deeply interested in. After all, the Arab Spring still haunts them.

We know that the European countries and the US both have played a significant role in giving the Saudi Kingdom the shape it has. But economic development and societal change also create new aspirations and urges.

We must understand that MBS has undertaken the challenging but unavoidable task of bringing liberalism and socio-political emancipation to conservative and inward-looking people. This is what Beijing considers a weak point in the relationship between the Arabs and the West.

Xi Jinping Filling The Gap

Last week, President Xi of China undertook a trip to Saudi Arabia. Besides holding talks with the crown prince, he also interacted with the leaders of the GCC. The talks were constructive and fruitful, said many media sources.

President Xi journeyed to the Gulf at a critical time. The war in Ukraine continues in full rage: its impact is almost global. Despite its looming shadow, a concerted effort of the international community to bring the fighting to an end remains elusive.

The economic crunch is intensifying, and the food problem is becoming alarming s, especially in poorer countries.

Bin Salman Xi Jinping
Crown Prince Mohammed bin Salman to host China’s leader Xi Jinping

The global dimension of economic recession apart, President Xi is the second super-power chief to visit China this year. Contemporary history will record a significant development shaping the Gulf region, which has been under the Anglo-American influence since the end of WW II.

Observers had never imagined that a day would come when relations between the Saudi Kingdom and the US, and in a broader sense, American-Arab relations would receive a setback.

Although the hydrocarbon reserves in the Gulf region have been the primary source of cordial relations between the Arabs and the Anglo-American bloc, the Gulf countries are happy to widen the canvas of relations to embrace many other areas leading to the overall improvement of life in the entire region.

President Xi’s visit to the Gulf and the glimpses of the type of relationship in the making or as reflected by the media make it clear that China will pose a strong challenge to the US regarding influence among the local potentates. Beijing finds a vacuum in the Gulf because Russia is embroiled in a war with Ukraine. How long the war will go, nobody can say.

Xi told the Gulf summit that there should be a new paradigm for energy cooperation and tried to boost the yuan’s role as a currency for trading in oil and gas – a move that could weaken the global dominance of the US dollar if successful. China has been focusing on introducing the yuan as the alternate currency for trading in oil and gas.

China is the largest oil importer from the Gulf, and Xi said in the meeting that his country would continue to import large quantities of crude oil long-term from GCC countries and purchase more LN.

“The Shanghai Petroleum and Natural Gas Exchange platform will be fully utilized for yuan settlement in oil and gas trading,” he asserted.

Xi also offered 5 billion yuan (US$718 million) in development aid to Arab nations. He announced granting of duty-free access to the least-developed countries in the region. China will send 500 agriculture experts to the area to boost food production and step up military and security exchanges, according to the Chinese foreign ministry.

Buying gold is also seen as a way for China to lower the proportion of US dollar assets it holds. According to the most recent official figures, China’s US dollar assets accounted for 59% of its foreign exchange reserves in 2016.

Saudi Arabia signed the Huawei deal during Chinese leader Xi’s visit despite US security concerns. Meanwhile, Beijing offered its backing to Arab efforts to resolve the crises in Syria, Libya, and Yemen, where Saudi Arabia plays a significant role in supporting the fight against Iran-backed rebels.

Beijing secured support for its stance on Taiwan and other sensitive topics, with a joint statement from the summit of the China-Arab state rejecting Taiwanese independence and pledging support for Beijing’s efforts to maintain national security in Hong Kong.

It also appreciated “the important efforts made to care for minorities on both the Arab and Chinese sides” – a veiled reference to Western criticisms of China’s treatment of the Uygurs and members of other Muslim minorities in Xinjiang.

China and the Gulf states also agreed to establish a joint forum on using nuclear technology, with China providing training, and to increase aerospace cooperation in remote sensing and communication satellites.

Xi also offered a role in China’s space program, saying, “China welcomes GCC astronauts to its space station for joint missions and space science experiments,” adding that he would consider establishing a China-GCC joint center for lunar and deep space exploration.

As part of China’s ongoing drive to bolster its position in the Middle East, state news agency Xinhua also reported that Vice-Premier Hu Chunhua would visit the United Arab Emirates and Iran on a four-day trip starting last Saturday.

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