• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 54 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 9 days Does Toyota Know Something That We Don’t?
  • 3 days America should go after China but it should be done in a wise way.
  • 9 days World could get rid of Putin and Russia but nobody is bold enough
  • 11 days China is using Chinese Names of Cities on their Border with Russia.
  • 28 mins "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 14 hours Even Shell Agrees with Climate Change!
  • 11 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 2 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 12 days Putin and Xi Bet on the Global South
  • 12 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
Oil Prices Remain Rangebound As Volatility Fades

Oil Prices Remain Rangebound As Volatility Fades

Oil price volatility has fallen…

£2.99 Long Haul Electric Bus Pilot Launched in UK

£2.99 Long Haul Electric Bus Pilot Launched in UK

FlixBus has launched a three-month…

Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

More Info

Premium Content

Saudi Arabia Deepens Energy Ties With China

  • Saudi Arabia and China have cemented their relationship with several agreements, including a $10-billion refinery project in China and Saudi's partial membership in the China-led Shanghai Cooperation Organisation.
  • Saudi's Energy Minister emphasized the importance of collaboration with China, especially in the renewable energy sector, instead of competing, showing a shift in Saudi Arabia's foreign relations strategy.
  • Despite the stronger ties with China, Saudi Arabia asserts that its relationships with other global powers remain significant and its global strategy isn't a "zero-sum game".

Saudi Arabia has long had deep ties with the East and the West thanks to its strong position in the international energy arena. The Kingdom has been an oil and gas superpower for decades and is now focusing its attention on the development of its green energy capacity, to lead in the world of renewables. But as it goes forward, it will have to decide on which international energy partners its wants to maintain and who it wants to compete with. China, a superpower in pretty much every energy source, is one such power. Over the last year, Saudi Arabia has been deepening its ties with the Asian giant, with greater collaboration suggesting a long-term energy partnership. 

China and Saudi Arabia have several long-standing ties, in energy and beyond. Until recently, when Russia overtook, Saudi Arabia was China’s top oil supplier. In 2022, it provided China with the equivalent to 1.75 million bpd of crude. And in December 2022, Saudi Arabia hosted the China-Arab summit, which was attended by Chinese President Xi Jinping. The two leaders discussed trade ties and regional security, an ongoing discussion for the states. They decided to align policies across several areas, including security and oil, without interfering in one another’s internal affairs. Saudi Arabia and China stressed the “the importance of stability in the world oil markets,” highlighting that Saudi Arabia is a reliable exporter of oil to its Chinese partner

In March, the two powers announced they would be working together to construct a landmark $10-billion refinery in the north-eastern Liaoning province of China, with funding from Saudi’s state-owned Aramco. This brings together the largest energy consumer worldwide and one of its biggest exporters. The development will consist of an integrated refinery and petrochemicals complex. Ashok Dutta, an oil industry executive based in Calgary, believes the move says “I’m committed to what you are doing, I will help you out and make this relationship more meaningful.” Aramco also acquired an expanded stake in a privately controlled Chinese petrochemical group for $3.6 billion. 

That same month, Saudi Arabia’s cabinet approved the decision to join the Shanghai Cooperation Organisation, a China-led political, security and trade alliance that includes member states such as Russia, India, Pakistan and four other central Asian nations. While it will not be considered a full member, the partial membership shows Saudi’s commitment to aligning its interests with China. Earlier in the month, China helped secure a deal for long-time Middle Eastern rivals Saudi Arabia and Iran to resume diplomatic relations and reopen embassies in one another’s countries, demonstrating China’s involvement in the region. 

And this month, Saudi’s Energy Minister, Prince Abdulaziz bin Salman, said that the Kingdom wanted greater cooperation with China on trade and energy, rather than competition. Bin Salman stated during the 10th Arab-China Business Conference: “We came to recognize the reality of today that China is taking, had taken a lead, will continue to take that lead. We don’t have to compete with China, we have to collaborate with China.”

The energy minister highlighted the value in working in partnership with China, as the Asian giant has already strongly developed its renewable energy sector, getting the “right manufacturers”. Further, China’s oil demand continues to grow year on year, showing significant potential for Saudi’s crude export market as demand in other parts of the world begins to wane. 

However, bin Salman was quick to state that this partnership does not mean that Saudi Arabia will stop collaborating with other world powers, such as Europe, South Korea, Japan, the U.S., and Latin America. When asked whether the strengthening of ties with China would affect Saudi’s relationship with other countries the minister said: “We are Saudi Arabia, we don’t have to be engaged in what I call a zero-sum game. We believe that there are so many global opportunities.”

Also at the event, Saudi Arabia signed a $5.6-billion deal with China’s electric vehicle maker Human Horizons to design and manufacture EVs. A total of $10 billion worth of agreements were signed in total during the Arab-China conference, across the technology, renewables, agriculture, real estate, minerals, supply chains, tourism, and healthcare industries. This demonstrates a greater commitment to deepening ties with China, as the Kingdom expands its investments beyond oil and gas to renewables. This also aligns Saudi’s Vision 2030, with the aim for greater economic diversification and the establishment of a strong renewable energy sector, that will support the development of smart cities. 

Over several meetings during the last year, Saudi Arabia has made it abundantly clear that it intends to continue developing its relationship with China, particularly in energy and security. As the two powers look to become world leaders in renewable energy, while also continuing their commitment to fossil fuels in the mid-term, they will align policies to support their energy industries. The Kingdom has suggested that this will not negatively affect its relations with other world powers, although some remain sceptical about this commitment. 

By Felicity Bradstock for Oilprice.com

ADVERTISEMENT

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Mamdouh Salameh on June 18 2023 said:
    With new World Order transitioning fast from a unipolar system led by the United States into a multipolar one and the US-led global financial system based on the dollar starting to give way to a multicurrency one led mainly by China’s yuan, Saudi Arabia is having to rest its international partnerships and its foreign policy.

    One particular partnership is starting to take the lead in the Saudi global orientation is China. Both Saudi Arabia and China have been deepening their partnership not only in energy but also in many mutually-beneficial other fields. China is now emerging as the most important strategic and economic partner for Saudi Arabia.

    Nothing could have exemplified this shift more than the Chinese Leader Xi Jinping’s visit to Riyadh in December 2022 and his attendance of a China-Arab summit, China brokering in Beijing a deal for the resumption of diplomatic relations between Saudi Arabia and Iran and Saudi Arabia’s plans to join the Shanghai Cooperation Organisation (SCO) as a ‘dialogue partner and also the BRICS alliance (Brazil, Russia, India, China and South Africa) accounting for 31.5% of global GDP. Moreover, China will soon sign a free trade agreement with the Gulf Cooperation Council (GCC) countries.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News