Saudi oil is exploited wisely • Troy Media
With crude oil fortunes on the rise, Saudi Arabia – the world’s largest crude producer – is playing its cards very well.
Crude oil markets have been transformed, with prices starting in 2022 at US$75.69 and now trading around US$115 a barrel. That’s a gain of just over 50 percent so far this year. And the upward flight continues.
Some observers believe that oil prices will continue to rise with the arrival of the summer driving season.
This may not be good news for consumers, but it is a boon for Saudi Arabia, the oil kingdom. Saudi oil giant Aramco reported a jump of more than 80% in profits last week.
After its lackluster performance in recent years, Aramco’s net income rose 82% to $39.5 billion in the first three months of this year, from $21.7 billion in the same period last year. last year. With a market capitalization of around US$2.43 trillion on Wednesday, Aramco overtook Apple last week to become the world’s most valuable company, Reuters reported.
Saudi Arabia doesn’t seem ready to budge despite pressure to turn on its crude taps. He strives to negotiate with world powers, especially the United States, before changing his position. The country is using its status as the world’s largest crude oil exporter to apparently have Crown Prince Mohammad bin Salman recognized by the United States as the leader of Saudi Arabia.
Bin Salman is using the country’s oil prowess to pressure US President Joe Biden to restore ties with the oil kingdom, following the murder of Saudi journalist Jamal Khashoggi.
The Saudis are also trying to stay on good terms with Russia and President Vladimir Putin, Biden’s nemesis, by avoiding taking a hardline stance on Ukraine. Nor are they ready to kick Russia out of the Organization of the Petroleum Exporting Countries and its OPEC+ partners.
Last week, Saudi Energy Minister Abdulaziz bin Salman stressed that Russia is an important and integral part of the group. He said OPEC+ is not a platform “for moral, ethical and political issues; when it comes to OPEC, we have successfully compartmentalized our political differences over the past 35 years.
Stressing that Russian oil production is crucial for global energy security, the Minister noted that Russia produces around 10 million barrels of oil per day, or around 10% of global consumption, and is therefore a major contributor to the global crude oil supply chain.
The United Arab Emirates, the other country with spare oil production capacity and a close associate of Saudi Arabia in OPEC+, has also insisted that Russia will always be part of the group, even if the governments around the world are shunning Russia for its war in Ukraine.
Speaking to CNBC on Monday, UAE Energy Minister Suhail Al Mazrouei said no other country can match Russia’s energy output. He argued that politics should not distract the group from efforts to manage energy markets. “OPEC+, when they (the crude consumers) talk to us, they have to talk to us, including Russia,” he said.
And despite American unease, the Saudis continue to cultivate a relationship with China. In a phone call earlier this year with Prince bin Salman, President Xi Jinping reiterated that China would continue to buy oil from Saudi Arabia. In March, the Wall Street Journal reported that talks were underway for Saudi Arabia to sell oil to China in yuan rather than US dollars.
The war in Ukraine could bring the Saudis and the Chinese even closer. This relationship reached new levels earlier this year when the two countries announced their intention to deepen their defense collaboration to a level of “practical cooperation”.
The Saudi policy of strengthening ties with Russia and China has helped increase pressure on Biden. The United States seems likely to back down, as it did when it allowed India to buy oil from Russia.
Members of the US Congress called Prince bin Salman in Jeddah last week to discuss bilateral relations between the two countries. Reports indicate that the United States is preparing to recognize Prince bin Salman as the de facto leader of the oil kingdom, despite his ties to Khashoggi.
Biden is apparently planning to visit Saudi Arabia as part of his Middle East trip in late June. It means meeting Prince bin Salman in person for the first time.
The Saudis have therefore played their crude oil cards well.
Based in Toronto, Rashid Husain Syed is a respected political and energy analyst. The Middle East is his favorite area. Besides writing for major local and global newspapers, Rashid is also a regular speaker at major international conferences. He has provided his perspective on global energy issues to the Department of Energy in Washington and the International Energy Agency in Paris. For maintenance requests, Click here.
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