Xi Jinping's visit to Saudi Arabia is bad news for the Kremlin




Saudi Crown Prince Mohammed Bin Salman welcomes Chinese President Xi Jinping in Riyadh, Saudi Arabia.
Saudi Crown Prince Mohammed Bin Salman welcomes Chinese President Xi Jinping in Riyadh, Saudi Arabia.  


Chinese leader Xi Jinping and Saudi crown prince Mohammed Bin Salman met this week in Riyadh to discuss oil trade and other issues.

On Dec. 9, the leaders of Saudi Arabia and China met in Riyadh-Xi Jinping's first visit there since 2016. He and his counterpart, crown prince Mohammed bin Salman, agreed meet more often and signed a number of deals broadly aimed at aligning the countries' mid-term development agendas, China's Belt and Road Initiative and Saudi's Vision 2030.

At the heart of Chinese-Saudi relations is oil. No specific oil deals were disclosed during the meeting, but the Riyadh meeting was clearly a chance for the countries to firm up their longstanding energy trade relations. Saudi Arabia is the top supplier of oil to China, and China is its biggest oil customer, importing $43.9 billion in Saudi crude in 2021.

Read more

  • 3 ways to reduce invisible labor for women at work

  • 36 ways to build a family-friendly culture

Now, though, there's a bear in the room: Russia.

In normal times, Russia and OPEC countries like Saudi Arabia see eye-to-eye on oil, sharing an intent to counter the US and Canada. When US president Joe Biden visited Saudi Arabia in June to push OPEC to raise its oil output, Saudi Arabia chose instead to hold its production steady. That strengthened Russia's hand, at a time when its oil exports are increasingly being sanctioned because of the war it is pursuing in Ukraine; Saudi Arabia's decision made it harder for other countries to spurn Russian oil. Not surprisingly, it also caused US-Saudi relations to deteriorate.

Russia and OPEC are competing for business in China

But in the case of China, Saudi Arabia and Russia are more at odds. Before it invaded Ukraine, Russia sold most of its oil to Europe. Now that market is closed off. China has become Russia's top oil customer, and has been able to wring deep discounts out of Russian suppliers, which have little choice but to accept. The alternative would be to cut off one of the Kremlin's most important sources of revenue.

"All the leverage is with China right now, because Russia doesn't have that many options," said Paddy Ryan, assistant director for European energy security at the Atlantic Council, a Washington think tank.

Russia's discounts, Ryan said, "might cause a bit of tension with OPEC, if [Russia's low prices] are pushing out the Saudis and UAE." Even though OPEC has picked up some of Russia's business in Europe, that market is much smaller than China, and European policymakers are pushing harder than ever to roll out electric vehicles and otherwise wean their nations off oil no matter the source: "The EU is not really a market you'd want to trade for India and China," Ryan said.

Xi's visit to Saudi Arabia and the agreements signed there suggest that China sees Russia's cheap oil as an opportunistic convenience and Saudi Arabia's oil as a safer long-term bet. That will worry Russia's producers, which are unlikely to regain their European market anytime soon.

  • Restaurant menu screens are looking at you to decide what you might want to eat

Click here to read the full article.

COMMENTS

More Related News

Why would China use a spy balloon when it has satellites?
Why would China use a spy balloon when it has satellites?

Experts say the use of the inflatable could be intended to send a message to Washington.

NATO urges Russia to respect nuclear pact with the US
NATO urges Russia to respect nuclear pact with the US
  • US
  • 2023-02-03 12:23:40Z

NATO called Friday on Russia to respect the only treaty it has with the United States aimed at keeping a lid on nuclear weapons expansion and urged Moscow to...

China confirms offer to Sri Lanka of debt moratorium
China confirms offer to Sri Lanka of debt moratorium
  • US
  • 2023-02-03 11:14:07Z

China's government on Friday confirmed it is offering Sri Lanka a two-year moratorium on loan repayments as the Indian Ocean island nation struggles to...

Pentagon says tracking Chinese spy balloon over US
Pentagon says tracking Chinese spy balloon over US
  • World
  • 2023-02-03 09:40:53Z

The Pentagon said Thursday it was tracking a Chinese spy balloon flying high over the United States, just days ahead of a rare visit to Beijing by the top US...

China hotel, catering job openings surge on post-COVID demand recovery - survey
China hotel, catering job openings surge on post-COVID demand recovery - survey

Chinese hotels and restaurants are seeking employees amid demand recovery in the services sector after the end of Beijing's zero-COVID protocols, with a...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy