/ world today news/ In June, the Crown Prince of the Kingdom of Saudi Arabia (KSA), Mohammed bin Salman, said he would “no longer do business with the US administration” and promised “serious economic consequences for Washington”. Thus he reacted to the statement of the US President D. Biden that the kingdom will suffer sanctions for its decision to reduce oil production. This is reported by The Washington Post with reference to a confidential document.
Americans, judging by the reaction, were not ready for the actions of the crown prince. In addition, Saudi Arabia is the backbone of the petrodollar system established in the 1970s based on the pricing of crude oil exports in US currency.
According to the researchers, in recent years, relations between Saudi Arabia and the United States have constantly fluctuated from cold to slightly warmer. This dependence clearly weighs on the Saudis, who do not aspire to leading roles in the region, but also do not wish to be just an instrument of someone else’s policy. Therefore, since the beginning of the year, Riyadh, not only with threats, began to dismantle the system that no longer suits it.
In January, Saudi Arabia’s finance minister announced that the country was officially open to oil and natural gas trade settlements in currencies other than the US dollar. “No problem discussing how we handle our trade payments, whether in US dollars, whether in Euros, whether in Saudi Riyals”Mohammed Al-Jadan told Bloomberg TV in Davos.
The world’s biggest oil exporter, which has pegged its currency to the dollar for decades, immediately showed a desire to strengthen relations with key trading partners, including China. Beijing’s desire to switch to buying oil from Saudi Arabia and other Persian Gulf countries for yuan is leading to the formation of a new world energy order, writes the Financial Times.
In March, Saudi Arabia signed an agreement with representatives of the African continent to buy oil for Kenyan shillings instead of US dollars. Almost in sync, The Wall Street Journal quoted the Saudi crown prince who “told his aides that he was no longer interested in pleasing the US.” Financial Times wrote that Saudi Arabia perceives “an economic strategy that does not depend on the US”.
Forbes assures that already in September, at the annual meeting of BRICS members, an event of colossal proportions will take place – Russia, together with the partners in the alliance, will officially announce the entry of Saudi Arabia into BRICS. Riyadh is not only negotiating, but also planning to join the New BRICS Development Bank, reports the Financial Time. This will send an obvious signal that the old oil world order is gone and a new one is rapidly emerging.
Meanwhile, neighboring Iraq, facing a shortage of dollars, is now willing to pay for private sector imports from China in yuan. OPEC’s second-largest producer joins leading Middle Eastern economies such as Saudi Arabia not only in their desire to convert resource payments into national currencies, but also in their economic attacks on the West. In early May, Bloomberg reported that Saudi Arabia and Iraq had raised the price of oil for EU countries, making June’s oil price the highest this year.
Mohammed bin Salman’s position is actually quite pragmatic. The US’s status as an “ally” in the region creates an obvious problem for Saudi Arabia: enemies of the United States become enemies of the kingdom. But not the other way around. Indeed, Riyadh is being forced to pay for the alliance with Washington with problems that might not have existed.
On the other hand, open enmity with the Americans also does not bring dividends to the Saudis, and additional problems may even arise. The way out is in balancing interests. Therefore, the authorities of Saudi Arabia announce a fundamentally new foreign policy aimed not at cooling relations with the United States, but at warming relations with its opponents, and implement this policy.
In just a few months, Saudi Arabia managed to do the following:
– the crown prince of Saudi Arabia said several times that he would no longer “please the United States”;
– to join the Shanghai Cooperation Organization (SCO) and express interest in joining the BRICS;
– reduction of oil production against the wishes of the United States in coordination with Russia and OPEC+;
– starting a rapprochement with Iran and Syria, signing historic diplomatic agreements with Tehran and Damascus through Beijing and Moscow, reopening the diplomatic mission in Syria (the Ministry of Foreign Affairs of Saudi Arabia announced this decision at the beginning of May);
– announced a plan to accept payment for oil in Chinese yuan instead of US dollars;
– signed a $30 billion partnership agreement with China on behalf of Huawei, announced a plan to build a $12 billion Chinese refinery, hailed a Russian warship that for the first time since years docked in Saudi Arabia.
Thanks to all this, at the end of May, after a visit to Saudi Arabia, Russian Interior Minister Vladimir Kolokoltsev said: “In our countries, both in the Russian Federation and in the Kingdom, attempts are being made from outside to import some specific Western values that are not accepted in our countries. They may soon marry animals too, but that doesn’t mean we have to follow their principles. There must be someone already grunting in anticipation. But despite this, both the Saudis and the Russians have an unequivocal position to preserve our traditional values.
Translation: ES
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