• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 9 mins Shale Oil will it self destruct?
  • 1 day NYT: Mass Immigration Roundups in U.S. to Start Sunday
  • 1 hour White House insider who predicted Iran False Flag, David Goldberg found dead in his New York apartment
  • 7 hours Germany exits coal: A model for Asia?
  • 47 mins Excellent Choice: Germany's Von der Leyen Secures Powerful EU Executive Top Job
  • 2 hours Migration From Eastern Europe Raises German Population To Record High
  • 19 hours Carrot And Stick: North Korea Suggests It Might Lift Weapons Test moratorium
  • 16 hours South Korea imports No Oil From Iran in June - First-Half Imports Fall 37%
  • 3 hours Starlink Internet Courtesy of Tesla
  • 7 hours A Silence is heard
  • 13 hours Washington Post hit piece attacking oil, Christians and Trump
  • 2 days U.S.- Taiwan: China Says Will Freeze Out U.S. Companies That Sell Arms To Taiwan
  • 20 hours Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
Alt Text

Oil Rises On U.S. Shut-Ins, Impressive Chinese Data

Despite lingering concerns over a…

Alt Text

The Energy Storage Industry Is Exploding

The energy storage industry is…

Alt Text

Renewables On Track To Pass Nuclear Energy

Though coal is still the…

Tim Daiss

Tim Daiss

I'm an oil markets analyst, journalist and author that has been working out of the Asia-Pacific region for 12 years. I’ve covered oil, energy markets…

More Info

Premium Content

The Khashoggi Killing Is Driving Saudi Oil Diversification

A Saudi human rights commission said on Thursday that it was bringing those accused over the murder of Saudi dissident journalist Jamal Khashoggi to justice. However, the commission also rejected an international investigation into the controversial case. The head of the commission, Bandar bin Mohammed al-Aiban, told the U.N. Human Rights Council that those on trial for the “heinous crime” and “unfortunate accident” at its Istanbul consulate on October 3 had attended three hearings so far with their lawyers present. He gave no names or details.

“Justice in the kingdom of Saudi Arabia operates pursuant to international law and it does so in all transparency,” Aiban told the Geneva forum during a review of Saudi’s rights record. He added that the kingdom would not accept what he termed as foreign interference in its domestic affairs and judicial system. Agnes Callamard, U.N. investigator on extrajudicial executions, said that Saudi officials have not responded to requests to cooperate with her investigation into the murder.

To date, at least eleven suspects have been indicted in Saudi Arabia for Khashoggi’s murder, while Riyadh has denied that Saudi Crown Prince Mohammed bin Salman ordered the killing. However, a CIA report released late last year found evidence implicating the crown prince’s involvement in ordering the killing. Bin Salman sent at least 11 messages to his closest adviser, who oversaw the team that killed Khashoggi, in the hours before and after the journalist’s death in October, according to a highly classified CIA assessment in December, which was viewed by the Wall Street Journal.

Bin Salman also in August 2017 told various associates that if his efforts to persuade Khashoggi to return to Saudi Arabia weren’t successful, “we could possibly lure him outside Saudi Arabia and make arrangements,” according to the assessment, a communication that it states “seems to foreshadow the Saudi operation launched against Khashoggi.”

U.S. lawmakers push back

Since then, most lawmakers in both the House and Senate have pressed for tougher action against Saudi Arabia and even the prince over the killing. This puts lawmakers at odds against President Trump who has largely resisted tougher actions due to his close relationship with Riyadh, as well as mutual U.S.-Saudi concerns over Iranian nuclear development, its ballistic missile program and Iranian hegemony pursuits in the region. Likewise, Trump is unwilling to damage business ties with Saudi Arabia. However, most of Washington’s growing anti-Saudi stance has and will continue to have serious reverberations that intersect not only U.S.-Saudi relations but also Sino-Saudi relations and hence U.S. relations with China.

Related: The EIA Cuts U.S. Oil Output Projections

Saudi Arabia’s geopolitical diversification strategy

Last month, bin Salman visited Beijing, likely with two ambitions in mind. First, with a growing backlash over both the kingdom and himself, he is seeking a strategy to diversify the kingdom’s geopolitical alliances, especially if there are cracks in the 70-plus year U.S.-Saudi alliance. Second, since U.S. imports of Saudi oil continue to decline, Riyadh wants to beef up both Asian and Chinese market share for its oil exports. China is already Saudi Arabia’s largest trading partner. During his trip to Beijing last month, bin Salman cemented a $10 billion deal for a refining and petrochemical complex in China. In an interview with China’s official news agency, Xinhua, last month, Saudi Arabia's Minister of Energy, Industry and Mineral Resources, Khalid bin Abdulaziz Al-Falih, said Saudi investment in China was "just starting."

Human rights concerns taken off the table

Moreover, unlike the U.S. which historically ties its bilateral relations with other nations to their respective human rights history, Beijing has none of those encumbrances as it deals not only with Saudi Arabia but other nations as well. A case in point is Beijing’s past support and relations with Sudan, even as that country was being accused of significant human right abuses against its own populace. At the G20 in Argentina late last year, when most leaders shunned bin Salman in the wake of the Khashoggi murder, Xi was one of the few leaders to be photographed warmly engaging the Saudi prince. He also exchanged in friendly discussions with President Vladimir Putin at the same meeting.

Going forward

Going forward, Saudi Arabia will continue to pursue closer ties with countries like China, Russia, and others that are at opposing sides with the U.S. on a myriad of fronts. Yet, this vital relationship that has survived over seven decades will survive the current fallout - it has too. The U.S., despite reduced Saudi oil imports still needs the kingdom’s heavy crude for its refineries, especially in light of recent problems with Venezuela’s oil imports to the U.S., which is also a heavier crude blend needed by most U.S. refineries. Washington also needs Riyadh as a solid and stable partner in the middle east as a check against Iran, while Saudi Arabia still needs U.S. security guarantees, especially for its ocean-going crude oil exports, while it also needs U.S. military hardware to continue to beef up its own security.

By Tim Daiss for Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play