By Saeed Ghasseminejad,
Senior Iran and Financial Economics Advisor
Once a bastion of Western influence in the Persian Gulf, Saudi Arabia may be shifting its allegiance toward the East. Tired of Washington’s wavering support, the Saudis are warming to China. Still, it is not clear Beijing can replace Washington.
For half a century, the special relationship between Washington and Riyadh has rested on an arrangement whereby the United States protects Saudi Arabia from foreign threats while the Saudis protect the Americans from instability in world oil markets. However, as the U.S. inches closer to energy independence, its reliance on Saudi oil has diminished. Their original arrangement now seems less relevant. Yet Washington still has substantial influence over Riyadh that it can leverage to keep the kingdom out of China’s orbit.
While the U.S. now produces more oil than ever, China’s voracious appetite for energy resources has only grown, and the Saudis have been more than willing to oblige. A Chinese proverb advises, “When you drink water, remember the source.” This also applies to oil, and Beijing is eager to show that it has greater influence over that source than Washington.
While becoming the largest importer of Saudi crude, China’s presence in the Saudi economy has also grown rapidly. It has become a major supplier of goods, from textiles and consumer products to heavy machinery. In 2022, trade in goods between the two countries reached $116 billion, $78 billion of which was Saudi’s exports to China. Meanwhile, the trade in goods between the U.S. and Saudi Arabia stood at $35 billion in 2022.
While the U.S. now produces more oil than ever, China’s voracious appetite for energy resources has only grown, and the Saudis have been more than willing to oblige. A Chinese proverb advises, “When you drink water, remember the source.” This also applies to oil, and Beijing is eager to show that it has greater influence over that source than Washington.
While becoming the largest importer of Saudi crude, China’s presence in the Saudi economy has also grown rapidly. It has become a major supplier of goods, from textiles and consumer products to heavy machinery. In 2022, trade in goods between the two countries reached $116 billion, $78 billion of which was Saudi’s exports to China. Meanwhile, the trade in goods between the U.S. and Saudi Arabia stood at $35 billion in 2022.
The crown jewels of Washington’s leverage are the years of Saudi dependence on U.S. military hardware, software, and training. A break with Washington would immediately render Riyadh far less secure. When it comes to intelligence, Riyadh has also relied on Washington’s assistance (though, when it comes to counterterrorism against groups like al Qaeda and ISIS, the Saudis have been critical). Furthermore, a lot of Saudi money is tied up in American firms. To reshape its economy and move beyond oil exports, the Saudis need American technology and innovation. Add to this Washington’s position as the hub of international financial networks, as well as its soft power and diplomatic heft.
America’s special relationship with Saudi Arabia may be in a coma, but it does not mean Washington cannot redefine its relationship with the Saudis to keep Riyadh in its orbit. Beijing simply cannot offer what Washington does, even if it can sometimes embarrass the U.S. with diplomatic moves like brokering a Saudi-Iranian detente. In the wake of that setback, the right move for Washington is to modernize its relationship with Riyadh, not write it off as a Chinese vassal.
Dr. Saeed Ghasseminejad is a senior Iran and financial economics adviser at the Foundation for Defense of Democracies, specializing in Iran’s economy and financial markets, sanctions, and illicit finance. Follow him on Twitter @SGhasseminejad. FDD is a Washington, DC-based, non-partisan research institute focusing on national security and foreign policy.
Here’s a related article:
The Bid to Dethrone the Dollar
The greenback’s dominance is here to stay. Here’s why.
— https://foreignpolicy.com/2023/05/12/dollar-dominance-global-trade-china-yuan-brics-currency/
I often see the “Spirit of ’66” on Israpundit, and no, I am not misstakenly referring to the “Spirit of ’67”, referring to the 6-Day War. I’m talking about the phenomenal chutzpah that led the Jewish people to think they could somehow overthrow the Roman Empire.
The Roman Empire of today is, obviously, the Western Empire, led by the United States of America. I will briefly show here, how this empire compares with the empires of old that Israel has had to deal with.
1. Egypt. God caused Israel to go into Egypt on purpose — not only briefly, as in the days of Abraham, but for hundreds of years in the time of Jacob. That sojourn led to the Jews being enslaved under hard labor, and caused the Israelites to cry out to God to save them. Israel survived those times, to the present day; but Egypt also has survived.
2. Assyria, the land of Nineveh and Saddam Hussein, etc. Those people were notable for their extreme cruelty, to Jews and to everyone else. They oppressed Israel and God delivered His people. The Jews continue to this day; but of course, so do the Assyrians.
3. Babylon. God commanded Israel to submit to the Babylonian king; but King Zedekiah refused because he feared his own generals. Zedekiah saw his children slaughtered before him, then had his eyes put out when he was carried captive to Babylon.
4. Persia. But for the courage of one Jewish woman, the King of Persia would have slaughtered every Jew in the realm — a people who were saved from historical extinction by the good graces of the Persian Cyrus.
5. The Greeks. The Jews lived in submission to the Greeks for hundreds of years; and except for Mattathias’s revolt, they would have become completely assimilated. After the long-fought Jewish victory, the Jewish leaders fought among themselves, ultimately calling upon the Romans to come restore order.
6. The Romans. From 66 to 70 AD, the Jews fought a hopeless war to overthrow their Roman masters. They tried again in 132-136, following one of several of their false messiahs. Thousands were slaughtered both times, and the Jews were scattered throughout the world.
7. The Franks and their successors, including the Germans, French, Spanish, Portugese, English, Dutch and others (including the US). The Jews have wandered as strangers among us for 2000 years, not able to find a piece of land they could call their own. These Gentiles banded together to form the United Nations, led, essentially, by the U.S., who granted them permission to re-settle their homeland.
I hear a lot of proud, sassy talk among some Jews, about what horrible people the Americans are, and how we have continually done evil to God’s people. God Himself is my witness, that this isn’t so. Modern Israel and I are about the same age; and during most of that time, Israel has had only one reliable ally: the United States; and at that, the born-again Christians of the United States. Every year, nearly all the other countries of the world rise up multiple times to condemn and try to harm Israel; but we have stood up against them on your behalf. I’m not boasting here — any good we have done, we have done by God’s grace and at His prompting; and I count it a high honor, to stand with the people who have stood with Israel.
In these evil times, there are powerful forces, all over the world, who want to destroy both America and Israel, along with Jews and Christians everywhere. A lot of Jews have joined themselves to our enemies, just as they did in the days of Mattathias. Or they run to the Saudis, or the Chinese, or the Russians, as they trusted in Egypt in the time of the King of Babylon. In their arrogance, they think they can pick and choose their deliverers.
The Spirit of ’66. Let’s see where it leads you.