According to the Wall Street Journal, a negotiation is underway between Saudi Arabia and China to allow Beijing to pay for the oil purchased in Renminbi, the Chinese currency. We have been talking about it for a while, the news has had a lot of prominence in the newspapers and it is worthwhile to investigate the context and scenario.
First of all, how much in motion means that from Riyadh there would be a blow under the belt against the American ally (the difficult ally), which would see the total domination of the dollar on the global crude oil market, where it is used as a single currency of reference. The one under construction is the alliance between the largest oil importer, China, with the largest exporter, Saudi Arabia: aspects that are central. Without this double role, the discussion would be non-starter.
The direct consequence would be the loss of universality of the concept of “petrodollar”, because there would be a “petroyuan” that would already be born very strong, and therefore would mean a substantial retreat of the United States on a central asset of international affairs. All conditional, because the issue is not brand new, dialogues have been ongoing at least since 2016, but now it seems that there could be an acceleration.
Consequence of an extremely critical context in relations between Washington and Riyadh where the presidency of Joe Biden has tried in every way to undo the Trumpian policies of evident proximity to the heir to the throne Mohammed bin Salman , and has therefore taken radically critical positions towards of the Crown Prince.
“The dynamics have changed dramatically. US relations with the Saudis have changed, China is the world’s largest crude oil importer and is offering many lucrative incentives to the Kingdom, ”a Saudi official told the WSJ. “China has offered everything imaginable to Riyadh,” he added. And the question of supply is the fulcrum: Washington has put in place negative incentives, pressures, but so far there is no will to expose itself for positive incentives.
Also because for the Democrat in the White House it would mean incurring criticism from a non-negligible component of his electorate that does not see in bin Salman the leader of an Arab renaissance but rather the instigator of the assassination of the Washington Post columnist Jamal Khashoggi(on the other hand, so Cia dixit) is the leader of a country where the question of rights is still backward.
Although in fact MbS (the international acronym of the prince) has pushed for emancipation, his reign is more news for the execution of 81 prisoners on March 13 than for a series of small but significant reforms. The system is complex, the role of the heir is accepted by an evolving generation, but on the outside it still suffers from a non-positive perception. In the relationship with Riyadh, various Western governments and individual politicians, above all that of Biden, must weigh actions with consensus.
On these dynamics, Xi Jinping ‘s Chinafind spaces. The principle of non-interference in the internal affairs of other countries becomes a value for the (authoritarian) model that Beijing intends to represent as a reference against that of Democracies, which Biden elevates to a vector of international politics – and with it the request to uncomfortable partners such as Saudis to reshape their way of life, according to the respect of canons and rights accepted by the West.
It is in this context that the American request to Riyadh to raise the level of oil production to rebalance prices for the moment lies unheard, while an invitation to Zhongnanhai arrives from the Saudi court to take Xi on tour to Arabia. Riyadh seeks direct projections, moves for personal interests, in the face of the American disengagement from the region – connected to the achievement of independence from Gulf oil and the need to increase concentration and efforts on Asia, that is, on China.
According to Cinzia Bianco, an expert on the Persian Gulf of the Ecfr in Berlin, in Riyadh there is a certain hatred towards Biden that drives certain responses. “It is almost a desire to punish him for his severe behavior towards the kingdom and this is also linked to certain flirtations with China”, she explains to
“Riyadh – she adds – she wants concessions, also in exchange for help with Russia, which Washington currently does not seem willing to grant. The reaction is similar to a look we are able to do (with China) ”.
A theme of friction, points out the expert of the pan-European think tank, and again Iran. The dynamics with which the JCPOA nuclear agreement is being recomposed, such as the press rumors circulated on the possible de-sanctioning of the theocratic IRGC military forces (the Pasdaran), “send the Saudis into a rage.” The Americans know this, but they are moving forward according to their own agenda.
Also for this reason the Saudis choose (for the moment) to respect the decisions taken with Russia in OPEC + regarding production; also for this reason the Emiratis, who announce cooperation with Moscow on energy security, have chosen to continue relations with China by blocking their inclusion in the F-35 program. However, there is an underlying theme: so far the United States has guaranteed the security of those countries, which – see the war in Yemen – have shown that they are not yet self-sufficient on the issue. China is unlikely to replace the Americans in this area – and much of the Washington-Gulf-Beijing relationship revolves around this.

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