Posted by: 30-01-2019, 15:33
Saudi Arabia plays dangerous games
According to many American politicians, Saudi Arabia takes great risks, tacking between Washington and Moscow.
Despite the long-standing and strong allied relations between the United States and Saudi Arabia (suffice it to recall how Trump defended the Saudis after the murder of journalist Kashoggi), in America, many are unhappy with the geopolitical games that Riyadh plays. Saudi Arabia (KSA), on the one hand, continues a close friendship with Washington, and on the other, it is building new relations with Moscow, mainly based on cooperation in the energy sector.
The latest «move” in this game Riyadh made in Davos, when representatives of Saudi Aramco announced their desire to buy gas assets in the United States and invest billions of dollars in this project to become a big player in the gas sector.
Aramco has recently diversified its assets in many countries. Now the Arabian oil giant, for example, owns America’s largest refinery — Motiva in Texas. Saudi Aramco President Amin Nasser told Reuters that the company intends to invest another $ 10 billion in Motiva.
«We have a good appetite for additional investment in the United States,” Nasser said. «The Aramco gas team has permission to acquire gas assets throughout the supply chain. We gave them substantial finances, measured in billions of dollars. ”
Representatives of Saudi Aramco are not the first time talking about the intention to enter the gas market, both natural and liquefied (LNG). However, this process — from the first to the last step, of course, is a long one.
Despite the long-standing ties of the KSA with the United States, which originated under the administration of F. Roosevelt during the Second World War, Riyadh also now emphasizes Oil Price, is actively building relations with its recent enemy, Moscow. The need to create such relations is caused by the difficult situation in the oil markets in recent years. KSA and Russia agreed in 2016 to reduce oil production in order to weaken the overstocking of the market and raise prices for «black gold”. This is how a new format of relations between oil-producing countries appeared — OPEC +, headed by Saudi Arabia and Russia.
Last year, Riyadh and Moscow agreed to reduce oil production once again. The goal is the same — to weaken the overstocking, which, however, is now provoked mainly by the trade war between the USA and China, as well as by the weakness of the developing economies, especially manifested during the record high production by the three main oil producers: KSA, RF and USA.
In the wake of the success of the previous agreement, which fulfilled its task, Saudi Arabia and Russia are going to extend cooperation to the gas sector. Riyadh wants to become a major investor in the rapidly developing sector of Russian liquefied gas, in which President Vladimir Putin plans, Russia will eventually compete with Qatar, Australia and the United States, the main players in the LNG market.
However, expanding cooperation in the oil and gas sectors, as well as jointly controlling oil prices, Riyadh and Moscow, notes Oil Price, create and strengthen allied relations in the geopolitical sphere. Moreover, in this area, the lion's share of cooperation and relations falls in the Middle East, where the United States and Russia usually have opposite interests and objectives. The latest example of this longstanding rivalry is the civil war in Syria.
Of course, it may take years to create a full-fledged geopolitical union, but at any time a situation may arise when Riyadh, it is possible, will have to choose between American interests and rapidly growing ambitions and Russia's prestige in the region. Most likely, this very difficult choice, which can determine the state of the oil and gas markets and affect the stability in the Middle East for many years, will have to be made by Crown Prince Mohammed bin Salman. What it will be, is difficult to say now. The farther in time this choice will be pushed back from today, the greater the chances, given the current pace of development of cooperation between Arabia and Russia, Moscow has to provide real competition to Washington in the struggle for the disposition of Saudi Arabia.
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