Saudi weekly digest. XIII
We’ll conclude the last week by starting with news from the business and economy.
As a surprise, OPEC introduced an oil production cut starting in May, which is intended to last until the end of 2023. The cut of more than one mln barrels per day aims to stabilise the oil markets.
As a continuation on the topic of oil…
Saudi Aramco has increased its investment in China by finalising a joint venture in northeast China and acquiring an expanded stake in a privately controlled petrochemical group. These two deals will make Aramco the largest crude oil supplier to China, with a combined supply of 690,000 barrels per day.
Riyadh, Saudi Arabia's capital, will host a Global Real Estate Summit next December. The summit considered the biggest of its kind, will focus on Saudi Arabia’s real estate sector in light of Vision 2030. During the event, various workshops, meetings, and lectures will take place to address the difficulties faced by the real estate industry and highlight the investment prospects currently available.
Lastly, on the topic of business and economy, there is still a lot of talk about the new airline Saudi Arabia is launching - Riyadh Air. The airline recently revealed a massive order for 39 Boeing jets with options for 33 more. As another building block to Vision 2030, the new airline aims to provide jobs, enhance tourism and hence contribute to the economy.
Regarding politics and diplomacy, the most significant news last week was…
…Saudi Arabia joining Shanghai Cooperation Organisation (SCO). Initially, the Kingdom enters the SCO as a dialogue partner and will be granted a full member status in the mid-term. The cooperation organisation is a political and security alliance consisting much of Eurasia and including China, Russia and India.
In addition…
China's President and Saudi Crown Prince spoke on the phone, discussing various topics, including supporting follow-up talks between Saudi Arabia and Iran, supporting each other on issues involving their respective core interests, and making contributions to promote peace, stability, and development in the Middle East. The conversation comes after Xi brokered a surprise deal last month between Iran and Saudi Arabia to restore diplomatic ties.
Following the normalisation agreements between Saudi Arabia and Iran, the ministers from both countries are to meet before the end of Ramadan. The meeting is meant to start the implementation of the monumental deal signed last month.
In a reciprocal gesture, Iran is to invite the Saudi king for a visit. The invitation is followed by the normalisation agreement reached between the two countries.
Some E2E thoughts on the previous week
First, the decision to cut oil production was met with less fury from Washington compared to the last time, when repercussions were promised for ‘aligning with the Russians’. This time White House has said that they were informed beforehand, however, they disagreed with the decision to cut production. This is a significantly milder reaction and could tell you a thing or two about Washington's stance on Saudi Arabia, the region and geopolitical developments in the Persian Gulf. This brings us to the second point.
Since China’s President visited Saudi Arabia late last year, the two countries have increased their cooperation. As noted above, on the political and diplomatic front, the ties between Saudi Arabia and China are growing deeper. To add some context, the power competition between the US, the former hegemon in the region, and China, the contender, has been going on for quite some time. The US has been pursuing a gradually smaller role in the Middle East while focusing on the Pacific, whereas China has been looking to expand its position in the Middle East. However, it is not believed that the US wants to leave the Middle East without any attention. Seeing China’s growing influence in the region, the US still wants to keep Saudi Arabia close, hence giving the Kingdom less of a hard time for the oil production cut.