• 15 mins ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 5 hours Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 9 hours Saudis To Award Nuclear Power Contracts In December
  • 12 hours Shell Approves Its First North Sea Oil Project In Six Years
  • 13 hours China Unlikely To Maintain Record Oil Product Exports
  • 14 hours Australia Solar Power Additions Hit Record In 2017
  • 15 hours Morocco Prepares $4.6B Gas Project Tender
  • 18 hours Iranian Oil Tanker Sinks After Second Explosion
  • 3 days Russia To Discuss Possible Exit From OPEC Deal
  • 3 days Iranian Oil Tanker Drifts Into Japanese Waters As Fires Rage On
  • 3 days Kenya Cuts Share Of Oil Revenues To Local Communities
  • 3 days IEA: $65-70 Oil Could Cause Surge In U.S. Shale Production
  • 4 days Russia’s Lukoil May Sell 20% In Oil Trader Litasco
  • 4 days Falling Chinese Oil Imports Weigh On Prices
  • 4 days Shell Considers Buying Dutch Green Energy Supplier
  • 4 days Wind And Solar Prices Continue To Fall
  • 4 days Residents Flee After Nigeria Gas Company Pipeline Explodes
  • 4 days Venezuela To Pre-Mine Petro For Release In 6-Weeks
  • 5 days Trump Says U.S. “Could Conceivably” Rejoin Paris Climate Accord
  • 5 days Saudis Shortlist New York, London, Hong Kong For Aramco IPO
  • 5 days Rigid EU Rules Makes ICE Move 245 Oil Futures Contracts To U.S.
  • 5 days Norway Reports Record Gas Sales To Europe In 2017
  • 5 days Trump’s Plan Makes 65 Billion BOE Available For Drilling
  • 5 days PetroChina’s Biggest Refinery Doubles Russian Pipeline Oil Intake
  • 5 days NYC Sues Five Oil Majors For Contributing To Climate Change
  • 6 days Saudi Aramco Looks To Secure $6B In Cheap Loans Before IPO
  • 6 days Shell Sells Stake In Iraqi Oil Field To Japan’s Itochu
  • 6 days Iranian Oil Tanker Explodes, Could Continue To Burn For A Month
  • 6 days Florida Gets An Oil Drilling Pass
  • 6 days Oil Prices Rise After API Reports Staggering Crude Oil Draw
  • 6 days Tesla Begins Mass Production Of Solar Shingles
  • 7 days EIA Boosts World Oil Demand Forecast For 2018 By 100,000 Bpd
  • 7 days Businessman Seeks Sale Of $5.2B Stake In Kazakhstan Oil Field
  • 7 days Exxon Accuses California Of Climate Change Hypocrisy
  • 7 days Norway’s Recovering Oil Industry Resumes Hiring
  • 7 days $2.3 Million Seized Following Singapore Oil Heist
  • 7 days China Nears 2016 Carbon Emissions Target
  • 7 days Oil Companies Respond Slow To New U.S. Lease Plan
  • 7 days Maduro To Issue First 100 Million Petros Despite Skeptics
  • 8 days Iraq Bans Kurdish Firm From Operating Kirkuk Oil Fields
John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

More Info

China Economic Clout and Nuclear Expertise Invades Saudi Arabia

China Economic Clout and Nuclear Expertise Invades Saudi Arabia

Ever since the end of World War Two, the U.S. has come to regard Saudi Arabia as almost its exclusive oil producing enclave.

In February 1945, after the Yalta Conference with Soviet General Secretary Iosif Stalin and British Prime Minister Winston Churchill, on his way home U.S. President Franklin Delano Roosevelt and King Ibn Saud met aboard the New Orleans-class heavy cruiser U.S.S. Quincy in the Suez Canal’s Great Bitter Lake. During the meeting, instigated by Roosevelt, he and Ibn Saud concluded a secret agreement in which the U.S. would provide Saudi Arabia military security, including military assistance, training and a military base at Dhahran in Saudi Arabia, in exchange for secure access to supplies of oil.

Sixty-seven years later, my, how things have changed, as China is now muscling into the Kingdom of the Two Holy Places.

On 15 January Visiting Chinese Premier Wen Jiabao and Saudi Arabian King Abdullah bin Abdul Aziz agreed to make concerted efforts to enhance bilateral relations.

The spectacle of OPEC’s leading petro-state and East Asia’s superpower economy making common cause has surely caused the burning of the midnight oil inside the Beltway.

While Wen said that China is willing to strengthen coordination with Saudi Arabia on all major issues by expanding cooperation in trade, investment, infrastructure, high-tech, finance, security and law enforcement, what must have surely caught the eye of Washington’s mandarins was him adding that China intends to develop a cooperative partnership with Saudi Arabia in the energy sector.

And why not? Saudi Arabia is the largest supplier of oil to China and bilateral trade between the two countries soared to $58.5 billion in the period January-November 2011.

And the fruits of such bilateral proximity were on the table even before Wen made his fulsome remarks, as the state-owned Saudi Press Agency reported on 14 January that Saudi state oil giant Aramco has signed an agreement with state-owned giant China Petroleum and Chemical Corporation Ltd. (Sinopec) to build an oil refinery, named Yasref, in the Red Sea city of Yanbu, which will become operational in 2014, processing 400,000 barrels per day.

What is really going to catch Washington’s and the foreign investment community’s attention is how the agreement is structured - Saudi Aramco will hold a 62.5 percent stake with Sinopec holding the remainder.

In one of 2012’s greatest understatements, Aramco president and CEO Khalid al-Falih said that the contract "represents a strategic partnership in the refining industry between one of the main energy producers in Saudi Arabia and one of the world's most important consumers."

Continuing his victory lap around the western shores of the Persian Gulf, Wen will also visit Qatar and the United Arab Emirates, two other stalwart U.S. allies.

And the eastern side of the Gulf?

Commenting on Iran, China’s third largest source of oil imports, on 11 January Chinese Foreign Ministry spokesman Liu Weimin said at a press briefing that China will maintain its trade ties with Iran despite efforts by U.S. Treasury Secretary Timothy Geithner to convince Beijing to join a proposed embargo of Iranian oil exports.

But perhaps the most intriguing element of the Riyadh-Beijing lovefest was the announcement that on 15 January Saudi Arabia signed an agreement with China for cooperation in the development and use of atomic energy for peaceful purposes, an event of significant importance that both Abdullah and Wen attended.

No comment is really needed here, except to note that many of the questions asked about Iran’s civilian nuclear power program, such as why does a leading petro-state need nuclear energy, are unlikely to be asked about this particular venture, underling that once again, reality in the Middle East is whatever your perceptions tell you in advance it is.

By. John C.K. Daly of Oilprice.com




Back to homepage


Leave a comment
  • Kein on January 19 2012 said:
    It is utterly amazing that our CINC has tactically and strategically destroyed some of our most crucial alliances in the world in one short term. Jimmy Carter gave us a mullah controlled Iran, for which it took us some 30 years to reap the wonderful benefits of his mastery of foreign policy. Now, the strategic blunder of ceding our strongest energy alliance partners, (Canada and Saudi Arabia) has come to pass. The Canadians will not, in any way feel tied to our country's need for oil, now will the Saudi's, once they've established a military/energy alliance with China. What a complete debacle this man's foreign policy has been. The biased press covers for this charlatan without so much as a critical essay on his blunders. They are as much to blame for the coming predicament this country will find itself in, as we attempt to compete against the Chinese. I hope all Americans understand that their standard of living is going to fall off of a cliff. If everyone believes that they've been hammered financially, for the last 3 years, just wait, you haven't seen anything yet.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News