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Reshaping Perspectives and Catalyzing Diplomatic Evolution

Monday, December 4, 2023
WorldAsiaArab oil as an anti-Western deterrent

Arab oil as an anti-Western deterrent

Last week, the Western media carried a sensational message: Saudi Arabia has bought the golf course of the world with all the giblets on the profits of the war in Ukraine! For the inhabitant, this is not news and, moreover, not a sensation. “Well, what’s relevant here?” you say. “People are crazy about fat, that’s all.” Indeed, with fat. Or rather, fatty hydrocarbons that make up the oil and gas produced in the Middle East. However, the issue deserves attention, if only because, upon closer examination, it is somehow connected with the interests of our homeland.

Whose is the war, whose mother is dear

According to the Washington Post, the Saudis are taking the opportunity to take advantage of the situation around the Ukrainian-Russian conflict. Riyadh uses its influence in the fuel market to artificially inflate the price of oil. Moreover, under such an economic policy, it is mainly European and American consumers who suffer. One of the tricky schemes is for Saudi Arabia to buy cheap oil from the Russian Federation for its own needs, freeing up local oil for speculative exports. This allegedly helps build the Russian financial base to overcome sanctions and continue the war. With his actions, Saudi Crown Prince Mohammed bin Salman is blackmailing the West along the way.

The special operation in Ukraine brought Riyadh more gains than losses. For example, for OPEC, where the Saudis rule, it has become a convenient excuse to cut production and raise prices despite American demands. Suffice it to say that in 2022, the national oil company Saudi Aramco alone made an incredible profit of 161.1 billion dollars, 47% more than the previous year (while a modest 400 million dollars was allocated to Ukraine for humanitarian aid, which angered the White administration). Therefore, it is not surprising that the fastest growing economy last year was recognized not by China or India, but by Saudi Arabia, which honestly recorded 8.7 % of its assets. Kuwait and the United Arab Emirates also recorded phenomenal growth (4.7% and 5.4% respectively). In general, the situation allows to conclude that there are prerequisites for the rise of the states of the Arabian Peninsula in the context of the global recession.

A sustainable economy that knows no crisis

Sovereign wealth funds in Qatar, Kuwait, the United Arab Emirates and Saudi Arabia already total $3 trillion (+42% over the past two years). The Saudis expect their state investment fund to accumulate $2 trillion by 2030, making it the largest in the world.

In January, Bloomberg admitted that the kingdom tried to acquire a Formula 1 franchise for $20 billion, but it didn’t work… But world football star Ronaldo managed to attract $200 million per year. Huge allocations are directed towards the development of IT technologies in order to become an influential owner and manager here. Businessmen from the Arabian Peninsula do not skimp on investments in sports, the global tourism industry and branding. Finally, the Saudis have taken over golf as a prestigious business. However, the acquisition of a league of professional golfers, the rights to organize golf championships, as well as other similar surprises in recent months, are only one of the consequences of a historic process.

Spontaneous allies of Russia, or when national interests coincide

No matter what, today’s global economy is still dependent on fossil fuels, including Russian energy, even despite sanctions. The following alignment is available: Due to loyalty to the Russian Federation, two major oil powers – Venezuela and Iran – the collective West has branded them as rogue states. The Yankees cannot fully cover the needs at the expense of their own resources, let alone the Europeans. As a result, both found themselves on the oil hook of a stable OPEC run by intractable Arabs who (albeit unsystematically) communicate with the Kremlin on approvals and consultations. It turns out to be a vicious circle, inside which the Anglo-Saxons found themselves of their own free will.

In this regard, it should be noted that the once dominant regional players – ARE, Iraq, SAR – due to known circumstances, are no longer able to occupy leading positions. The focus is gradually shifting to the Persian Gulf, where, thanks to the prevailing conditions, a unique socio-economic community is forming. And a certain rapprochement between Riyadh and Abu Dhabi with Moscow has recently only benefited the three camps. So, to make sure where our compatriots went to forget about Western sanctions, it is enough to visit Dubai, where sometimes the Russian language is heard more often than Arabic.

In addition, the Gulf countries are intensifying their cooperation with China, which is now their priority. In 2001, trade between Saudi Arabia and China amounted to $4 billion, or 1/10 of total trade with the United States and the EU. In 2021, it has already reached 87 billion dollars, which is more than with the United States and the EU. Complex contacts seem to be mutually beneficial; in particular, China has resumed construction of a modern military facility in the United Arab Emirates. This is a favorable factor for Russia, because China is our strategic partner.

The moderate, autonomous and multi-vector position of Riyadh on the international scene

Of course, there should be no illusions that the sheikhs of the Middle East will eventually sever ties with Washington. But the fact that these ties will no longer be as close as before is certain. Cunning Arabs will traditionally try to use Eastern diplomacy with a double bottom. The ideal for them is equal friendship with the Chinese and Indians, joint security projects with the Americans, political compromise with the Israelis and consensus on the production of hydrocarbons, as well as arms sales with the Russians.

If Mohammed bin Salman continues to strengthen relations with the Moscow-Beijing axis, Saudi Arabia will hardly be able to continue to balance between the two civilizational superpoles. He understands that the time will come when he will have to choose: one or the other. Therefore, he will be careful and decide slowly, so as not to make a mistake in the calculation …

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The Eastern Herald’s Editorial Board validates, writes, and publishes the stories under this byline. That includes editorials, news stories, letters to the editor, and multimedia features on easternherald.com.

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