• 4 minutes Nord Stream 2 Halt Possible Over Navalny Poisoning
  • 8 minutes America Could Go Fully Electric Right Now
  • 11 minutes JP Morgan says investors should prepare for rising odds of Trump win
  • 8 hours US after 4 more years of Trump?
  • 2 days Daniel Yergin Book is a Reality Check on Energy
  • 3 days Permian in for Prosperous and Bright Future
  • 2 days Famine, Economic Collapse of China on the Horizon?
  • 2 days Oil giants partner with environmental group to track Permian Basin's methane emissions
  • 21 mins Something wicked this way comes
  • 29 mins Why NG falling n crude up?
  • 3 days YPF to redeploy rigs in Vaca Muerta on export potential
  • 3 days Gepthermal fracking: how to confuse a greenie
  • 3 days Top HHS official takes leave of absence after Facebook rant about CDC conspiracies
  • 14 hours The Perfect Solution To Remove Conflict Problems In The South China East Asia Sea
  • 2 days Open letter from Politico about US-russian relations
  • 4 days Surviving without coal is a challenge!!

Breaking News:

Norway’s Oil Fund Is Buying Bitcoin

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